Baird reaffirmed its positive stance on Twist Bioscience (NASDAQ:TWST), maintaining an Outperform rating and a price target of $46.00. The firm's analyst monitored the company's Express Genes service, noting pricing trends for the product. The observed data revealed that the average premium charged to academic institutions in October remained stable at approximately 42%, slightly down from around 43% in September.
The analyst refrained from drawing definitive conclusions from this pricing data on the overall synthetic genes revenue or the cumulative gross margin percentage performance for Twist Bioscience. Despite the reduction in premiums compared to September, the analyst suggested that the continued elevated pricing could be interpreted as a positive indicator of demand for the company's offerings.
The report encourages interested parties to contact a Baird representative to request additional datasets. This invitation indicates Baird's willingness to provide further insights into the metrics that could be influencing their rating and price target for Twist Bioscience.
Twist Bioscience specializes in synthetic DNA manufacturing for various applications, including medical research, agricultural biology, and industrial chemicals. The company's stock performance is often evaluated by analysts based on multiple factors, including product demand, pricing strategy, and market competition.
Twist Bioscience Corporation reported a significant 28% year-over-year increase in revenue for the fiscal third quarter of 2024, totaling $81.5 million. The company's gross margin also improved to 43.3%, with an aim to exceed 50% by the end of fiscal 2025. Projected Q4 revenue for the company is estimated to be between $82 million and $83 million, indicating a 27% expected increase in total revenue for fiscal 2024.
Twist Bioscience has also announced recent changes in its team. James Thorburn transitioned to a Strategic Advisor role, providing consulting services at $25,000 per month. In addition, Mike Fero, Ph.D., was appointed as the new Chief Information Officer, bringing over three decades of experience in startups, software development, and deep-tech industries.
Baird, a financial services firm, maintained its Outperform rating on Twist Bioscience. This rating was based on the analysis of the company's Express Genes pricing premiums, which showed consistent demand from academic and industry sectors.
Twist Bioscience has also expanded its DNA synthesis capabilities, now offering gene fragments up to 5.0 kilobases in length. In collaboration with bitBiome Inc., the company launched a Transaminase Enzyme Screening Kit, providing a more environmentally friendly alternative for synthesizing chiral amines, key components in drug manufacturing.
InvestingPro Insights
Twist Bioscience's financial metrics and market performance offer additional context to Baird's analysis. According to InvestingPro data, the company has shown significant growth, with revenue increasing by 25.37% over the last twelve months to $295.21 million. This aligns with Baird's observation of continued demand for Twist's products, despite slight variations in pricing premiums.
InvestingPro Tips highlight that TWST has experienced a "significant return over the last week" and a "high return over the last year," with the 1-year price total return standing at an impressive 160.17%. This performance supports the positive sentiment expressed in Baird's Outperform rating.
However, it's important to note that TWST is "not profitable over the last twelve months," with an operating income margin of -64.34%. This explains why analysts, as another InvestingPro Tip suggests, "do not anticipate the company will be profitable this year."
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Twist Bioscience, providing a deeper understanding of the company's financial health and market position.
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