Goldman Sachs (NYSE:GS) initiated Pacific Biosciences of California (NASDAQ:PACB) with a Buy rating and price target of $17, representing a 30% upside, in a note to clients on Friday.
The firm told investors in a note that they "believe the new Revio long read instrument launch from PACB is transformative for the company."
Goldman said it represents the most credible, long-term competitive challenge to Illumina (NASDAQ:ILMN), the established leader in short-read sequencing.
"With Revio, we believe the economics have come closer in line while accuracy issues have been effectively addressed over time making the comparison between long to short read a viable decision point for a customer," the firm added.
"We estimate the addressable sequencing market to be $11.1bn by 2026 and for PACB to capture 5% of share over time resulting in 44.3% revenue CAGR over that time period, making it one of the fastest growing companies in our coverage universe."
The analysts concluded that PACB's ability to come to market with a long read and short read solution is "relatively unique" and may resonate with customers.