Pacific Biosciences of Californ — Earnings Quality Grade F
PACB · Healthcare
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO surged by 16 days (65 → 81)
Small-cap context: DSO swings on a small revenue base are more often quarterly customer-mix effects than red flags.
AR growth 28.8% exceeds revenue growth 3.9%
Revenue 3.9%, CFFO 46.0%. Cash follows revenue
Expense Quality
Inventory -16.1% vs COGS -2.1%. Normal
CapEx growth 24.7% is >2x revenue growth 3.9%
SG&A/Gross Profit = 309.1%, exceeds 70%
Gross margin 28.6%, change +4.4pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF is negative ($-0.1B)
Accruals ratio = -55.5%. Low accruals
Cash $0.3B covers only 40% of debt $0.7B
Balance Sheet Health
Goodwill+Intangibles $0.3B = 6223% of equity. Over 50%
Interest coverage = -80.2x (<2x). Financial stress
Other assets -4.9% vs revenue 3.9%. Normal
Write-offs normal
Acquisition Risk
FCF after acquisitions negative for 3 years
Small-cap context: A single acquisition on a small balance sheet can trip serial-acquirer logic.
Goodwill+Intangibles change -53% YoY. Normal
Manipulation Score
M-Score = -5.20 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25