10 Worst ARK Stocks To Buy According to Short Sellers

3. Pacific Biosciences of California, Inc. (NASDAQ:PACB)

Short Interest as % of  Shares Outstanding: 19.04%

Number of Hedge Fund Investors In Q3 2024: 20

Ark Invest’s Q3 2024 Stake: $56.8 million

Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a genomics company that provides medical devices for applications such as consumables and sequencing kits. Within its industry, the firm enjoys a considerable moat since it makes and sells both long and short-sequencing items. However, the exclusive reliance on gene sequencing means that the industry has to thrive for Pacific Biosciences of California, Inc. (NASDAQ:PACB) to prosper. The firm’s fate depends on spending in the biotechnology industry, and the spending, in turn, is dependent on interest rates and the broader health of the economy. Pacific Biosciences of California, Inc. (NASDAQ:PACB) is currently planning an upgrade for its Revio HiFi sequencing systems, and along with product adoption, the narrative also depends on the firm’s goal to achieve $75 million in cost savings by year-end and cash flow positivity by 2026.

Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s management shared its strategic goals during the Q3 2024 earnings call. Here is what they said:

“We continue to improve our per unit cost of Revio instruments and consumables significantly. We expect to end the year with Revio instrument standard COGS over 10% lower than when we launched the platform and consumable unit costs over 20% lower. These costs and operational improvements are expected to continue beyond 2024, driving quarterly gross margin expansion in 2025 and beyond as some of our recent cost improvements are expected to be realized in 2025.

. . . Finally, we remain committed to our plan of turning the business cash flow positive by the end of 2026 under various revenue scenarios which include revenue growth in 2025 and beyond with new products and growing consumables often increasing Revio install base, expanding gross margins with reduced manufacturing per unit costs and a continued mix shift to consumables and lower non-GAAP operating expenses in 2025 compared to 2024 with minimal growth expected thereafter. We will provide more details behind our assumptions and our updated long term guidance at a later date and more details about our 2025 guidance early next year.”