Key insights
- An analysis of 10x Genomics (TXG) suggests the stock's recent surge may not be justified by its intrinsic value. A discounted cash flow model indicates potential overvaluation, with the stock scoring poorly on valuation checks. While the stock has seen significant gains over the past year, longer-term returns are negative, highlighting the importance of timing and valuation. This suggests a slightly bearish outlook for the stock.
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If you are trying to work out whether 10x Genomics at around US$20.92 is still good value or already pricing in a lot of optimism, it helps to break the story into simple numbers first.
The stock has fallen about 5.0% over the last week and 10.1% over the last month, yet it is still up 25.9% year to date and 116.8% over the past year. However, longer term 3 year and 5 year returns are down 59.9% and 86.1% respectively, which makes timing and valuation especially important.
Recent coverage has focused on how 10x Genomics fits into the broader life sciences tools space and what that could mean for sentiment around the stock. These stories help explain why the share price can swing sharply as expectations adjust, even without company specific announcements in the headlines.
On Simply Wall St's 6 point valuation checklist, 10x Genomics scores 2 out of 6. The next sections will break down what that means across different valuation methods and then finish with a framework that can help you interpret those numbers in a more complete way.
10x Genomics scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow model takes estimates of the cash a company could generate in the future, then discounts those projected cash flows back into today’s dollars to arrive at an intrinsic value per share.
For 10x Genomics, the model used is a 2 Stage Free Cash Flow to Equity approach, based on current Free Cash Flow of about $105.5 million. Simply Wall St projects Free Cash Flow out to 2035, with estimates such as $111.4 million in 2026, $116.9 million in 2027 and $150.8 million in 2035. These figures are discounted each year, for example to $103.5 million in 2026 and $71.7 million in 2035, and include an analyst Free Cash Flow estimate of $120 million for 2029.
When all those discounted cash flows are added together, the model arrives at an intrinsic value of about $20.83 per share. Compared with the current share price of around $20.92, the DCF suggests the stock is about 0.5% above this estimate, which is essentially in line with the model output.
Result: ABOUT RIGHT
10x Genomics is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for 10x Genomics.
For companies that are not yet generating consistent profits, the P/S ratio is often more useful than P/E, because it compares the share price to revenue rather than earnings that can swing with investment cycles or one off items.
In general, higher expected growth and lower perceived risk can justify a higher P/S multiple. In contrast, slower growth or higher risk tend to support a lower multiple as a more cautious “normal” level.
10x Genomics currently trades on a P/S of 4.16x. That sits above the Life Sciences industry average of 3.52x, but below the peer group average of 8.94x, which suggests the stock is priced between broad sector expectations and more closely matched peers.
Simply Wall St’s Fair Ratio for 10x Genomics is 4.41x. This is a proprietary estimate of what a reasonable P/S might be, after factoring in elements such as the company’s growth profile, profit margin, risk characteristics, industry and market cap. Because it adjusts for these company specific features, the Fair Ratio can give a more tailored guide than simple peer or industry comparisons.
Comparing the Fair Ratio of 4.41x with the current P/S of 4.16x points to the shares trading slightly below that tailored estimate.
Result: UNDERVALUED
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Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple tool on Simply Wall St's Community page where you connect your story about 10x Genomics with explicit forecasts for revenue, earnings and margins. These then roll into a Fair Value you can compare against the current price to judge whether the stock looks expensive or cheap on your terms. Because Narratives update automatically when fresh news or earnings arrive, you can see, for example, how one investor might build a cautious 10x Genomics view around a Fair Value of US$17.00 while another leans into a more optimistic story at US$32.00. Both perspectives sit side by side so you can decide which set of assumptions feels closer to your own.
For 10x Genomics however we will make it really easy for you with previews of two leading 10x Genomics Narratives:
These sit on opposite sides of the debate, so you can see how different assumptions on funding, product uptake and margins translate into very different fair values for the same stock.
🐂 10x Genomics Bull Case
Fair value: US$32.00
Gap to this fair value at the current US$20.92 price: about 34.6% below the narrative fair value
Revenue growth assumption: 5.26% a year
Views lower priced products, spatial consumables and software as strong enough to support faster volume growth and a larger, higher margin consumables stream.
Assumes biopharma, global research projects and new organoid and AI driven use cases accelerate adoption and improve earnings stability over time.
Accepts risks around funding pressure, competition and R&D intensity, but still sees room for earnings to reach about US$115.9m by 2029 if margins move toward Life Sciences peers and the stock trades on a P/E of around 49x.
🐻 10x Genomics Bear Case
Fair value: US$17.00
Gap to this fair value at the current US$20.92 price: about 23.1% above the narrative fair value
Revenue growth assumption: 2.73% a year
Focuses on prolonged uncertainty in US academic and government funding, potential policy shifts and regulatory or geopolitical friction that could cap long term revenue from core customers.
Highlights high ongoing costs, legal and patent risks and tougher competition in single cell and spatial genomics as reasons margins could stay under pressure even if revenue improves.
Builds to a view that earnings could reach about US$108.2m by 2029 with margins moving toward industry levels, but that a lower P/E of about 27x is more appropriate, which points to a fair value of US$17.00.
Both narratives rely on the same company, the same industry and overlapping data, yet they land in very different places on value. Your task is to decide which set of assumptions feels closer to how you think funding cycles, competition and product adoption could play out for 10x Genomics, or to build a version of the story that sits somewhere between them using Narratives on the Community page.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for 10x Genomics on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Do you think there's more to the story for 10x Genomics? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TXG.
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