Pacific Biosciences of California, Inc. (PACB): fair value, margin of safety and Wheel Score

Is PACB undervalued?

Pacific Biosciences of California, Inc. (PACB) closed at 1.99 on 16 Oct 2026. None of the nine GLS valuation models produced a positive value for the stock - the company lost money over the last twelve months, EPS -0.42, it pays no dividend and its debts exceed what its assets would fetch - so there is no GLS average fair value and no margin of safety to report. The quality, option and event numbers below still apply; the Quote page's Wall Street View shows what analysts expect instead.

The nightly engine files PACB under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for PACB

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: PACB passes 2 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 0.9 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are thin or negative - ROIC -71.4%, ROE -10214.5%, ROA -69.7% - with debt at 142.07 times equity and negative free cash flow. Debt of 142.07 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

Pacific Biosciences of California, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Product 46%, Consumable 28%, Instrument 18% (quarter Q2 FY2026).

Institutional ownership scores 8/10, insider activity 2/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 38: Weak

PACB scores 38 out of 100 on the Wheel Score, in the Weak band (under 50). Value 13/25, Health 4/20, Moat 1/15, Premium 7/20, Stability 12/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.

Implied volatility is 110% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (7 of 20) because volatility this high usually comes with a reason. The option chain is deep: 193,294 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 9.2M shares a day on a market cap of $619M, with a beta of 2.19 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 12 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 3 Nov 2026 (after the close), 18 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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