Cell Engineering MaxCyte Faces Challenge, Analysts Express Concerns Over Near-Term Prospects Amid Revenue Decline

MaxCyte Inc MXCT shares plummeted after the company released preliminary Q3 revenue of $7.8 million – 8.0 million, a Y/Y decrease of 25 -27%, due to continued reduced customer activity in the sector.

The company sees Q3 core business revenue of $6.4 million-$6.6 million, down 33% - 35% Y/Y.

For FY23, MaxCyte sees total sales of approximately $34 - 36 million, below the consensus of $35 million.

Core revenue is now expected to be approximately $28 - 30 million. Earlier, the company expected core revenue for 2023 to be comparable to 2022.

According to management, most of the change between the previous outlook and this update was from lower-than-expected Processing Assembly sales.

William Blair notes that the underperformance in Processing Assembly sales had a cascading effect on Q3's Cell Therapy and Drug Discovery results. 

Notably, for the first time, management acknowledged that Processing Assembly sales faced softness even among SPL partners, a segment that had previously demonstrated resilience in the face of macroeconomic challenges.

In addition to the PA sales decline, management observed that customers, particularly those in the early stages, were adopting a more cautious approach to significant capital expenditures. 

However, it's worth noting that lease revenue has remained steady amidst these dynamics.

The analyst notes that MaxCyte base business will remain under pressure until the macro environment improves. With the approaching exa-cel approval decision and continued adoption of MaxCyte's technology by SPL partners, the company offers a compelling value proposition for investors.

Price Action: MXCT shares are down 21.10% at $2.58 on the last check Thursday.