What Happened?
Shares of biotech company 10x Genomics (NASDAQ: TXG) fell 5.5% in the morning session after the company reported strong second-quarter results that surpassed Wall Street's expectations for both revenue and profitability. The company announced revenue of $172.9 million, a 12.9% increase from the prior year and a significant 24% above analyst estimates. Profitability was a major bright spot, with GAAP earnings per share of $0.28, crushing the consensus forecast of a $0.37 loss per share. This impressive performance overshadowed a slightly cautious outlook for the upcoming third quarter, where the company's revenue guidance of $142 million came in just below analyst projections. Investors focused on the strong current performance, seeing the substantial earnings beat as a positive sign for the company's operational efficiency and market position.
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What Is The Market Telling Us
10x Genomics’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock dropped 3.7% on the news that industry bellwether UnitedHealth Group (UNH) slashed its 2025 profit forecast after reporting a significant surge in medical costs, sending shockwaves across the health insurance sector. The core of the issue stems from an “unprecedented medical cost trend environment,” particularly within the Medicare Advantage market, which are privately run versions of the federal health insurance program. UnitedHealth, the largest provider in this space, now expects these costs to rise by 7.5% in 2025, a significant jump from its earlier 5% projection, with the potential to accelerate to almost 10% in 2026. In response, the insurer announced it will drop plans covering over 600,000 people. The company's lowered earnings forecast has raised investor concerns that these surging costs and utilization rates are an industry-wide problem, impacting the profitability of other carriers as well.
10x Genomics is down 13.2% since the beginning of the year, and at $12.31 per share, it is trading 47.6% below its 52-week high of $23.49 from August 2024. Investors who bought $1,000 worth of 10x Genomics’s shares 5 years ago would now be looking at an investment worth $127.04.
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