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Baird reaffirms outperform rating for Twist Bioscience stock with raised target

EditorAhmed Abdulazez Abdulkadir
Published 11/19/2024, 09:10 PM
TWST
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On Tuesday, Baird maintained an Outperform rating on Twist Bioscience (NASDAQ:TWST) and increased the price target to $48.00 from the previous $46.00. The adjustment follows Twist Bioscience's report of a solid fiscal fourth quarter, where both revenue and gross margin percentage surpassed Baird's projections. The company's performance was robust across the board, with each segment slightly exceeding the provided guidance. Order growth was notable, with a year-over-year increase of approximately 24%.

The initial revenue guidance for fiscal year 2025 provided by Twist Bioscience was slightly higher than Baird's earlier estimates. Moreover, the gross margin percentage outlook for the upcoming year aligns with previous expectations, including an anticipation of about 50% gross margin percentage in the fourth quarter of fiscal year 2025.

Baird's positive outlook is bolstered by the momentum in synthetic biology and next-generation sequencing, as well as remarks on the potential of the Express portfolio. The firm also notes improvements in broader gross margin percentages and maintains a constructive view on Twist Bioscience's prospects going into fiscal year 2025.

Twist Bioscience's fiscal fourth quarter report has evidently underpinned Baird's confidence in the company's trajectory. With the raised price target and sustained Outperform rating, Baird signals its optimism about the company's future performance and market position.

In other recent news, Twist Bioscience Corporation (NASDAQ:TWST) reported a robust Q4, with revenues seeing a 27% increase to $84.7 million compared to the same period last year. The company's total revenue for the fiscal year increased by 28% to reach $330 million. The company also exceeded its gross margin guidance for the quarter, achieving 45.1%, and saw an annual gross margin improvement to 42.6%.

In the earnings call, Twist Bioscience's CEO, Emily Leproust, and CFO, Adam Laponis, discussed the company's performance, strategic initiatives, and outlook for fiscal 2025. The company aims to achieve a 50% gross margin by the end of Q4 fiscal 2025 through increased operational efficiencies.

Looking ahead, the company forecasts fiscal 2025 revenue to be between $367 million and $377 million. The company expects SynBio revenue to grow 15% to 18%, while NGS revenue is projected to increase 20% to 24%. Adjusted EBITDA losses are anticipated to improve to between $60 million and $65 million.

Twist Bioscience's strong financial position was further bolstered by an additional $15 million received from XOMA in October 2024. With a customer base of over 3,500 and a strategic push towards adjusted EBITDA breakeven, the company is well-positioned for sustained growth.

InvestingPro Insights

Twist Bioscience's recent performance aligns with several key insights from InvestingPro. The company's robust revenue growth, as highlighted in Baird's analysis, is reflected in InvestingPro data showing a 25.37% revenue growth over the last twelve months. This growth trajectory supports Baird's optimistic outlook on the company's prospects.

InvestingPro Tips reveal that Twist Bioscience holds more cash than debt on its balance sheet, indicating a strong financial position that could support its ongoing growth initiatives in synthetic biology and next-generation sequencing. Additionally, the company's liquid assets exceeding short-term obligations further reinforces its financial stability.

However, investors should note that despite the positive revenue growth, Twist Bioscience is not currently profitable, as indicated by another InvestingPro Tip. This aligns with Baird's focus on the company's improving gross margin percentages, suggesting that profitability remains a key area for potential improvement.

For a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Twist Bioscience's financial health and market position. These additional tips could be particularly valuable for investors looking to make informed decisions based on the company's recent performance and future prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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