10x Genomics: Solid Q4 Rebound but Sustainability Questions Justify Maintaining Hold

Morgan Stanley analyst Kallum Titchmarsh has maintained their neutral stance on TXG stock, giving a Hold rating yesterday.

Kallum Titchmarsh has given his Hold rating due to a combination of factors tied to both encouraging recent performance and remaining uncertainties. He notes that 10x Genomics’ preliminary fourth-quarter revenue exceeded guidance and consensus, with broad-based strength across Single Cell and Spatial consumables and better-than-expected Spatial instrument placements. The rebound in Single Cell consumables, helped by lower-priced product introductions, and robust growth in Spatial consumables signal improving utilization and higher-value experimental activity among customers, which he views positively.

At the same time, Titchmarsh highlights that the sustainability and underlying drivers of this improvement are not yet fully proven. It is still unclear how much of the Single Cell consumables strength is attributable to the Scale acquisition, and he remains cautious about the pace of recovery in the academic and government funding environment, despite recent stabilization in headlines. Given these open questions and the need to confirm that recent momentum can be maintained over multiple quarters, he prefers to remain on the sidelines with a Hold rating rather than move to a more bullish stance at this stage.