Genomics firm Twist Bioscience's Momentum To Continue Throughout 2024, Analyst Says

Thursday, Twist Bioscience Corporation TWST reported a second-quarter EPS loss of $(0.79), better than a loss of $(1.04) a year ago and the consensus of $(0.81).

The synthetic biology and genomics company reported sales of $75.3 million, up 25% Y/Y, beating the consensus of $70.66 million. Orders increased to $93.2 million, up 45% Y/Y.

Gross margin for the second quarter of fiscal 2024 increased to 41% compared to 31% a year ago.

Shipped products to 2,253 customers, up from 2,100 a year ago. Shipped approximately 193,000 genes, up from approximately 152,000 a year ago.

Guidance: Twist Bioscience expects third-quarter revenue of $77 million (Est $73.8 million) and $77 million-$80 million for the fourth quarter (Est $77.2 million).

The company raised fiscal year 2024 sales to $300 million-$304 million, compared to $288 million-$293 million and the consensus of $293.1 million.

William Blair says both SynBio and NGS segment revenue came in above expectations, with SynBio driven by demand for both traditional genes and Express Genes, while NGS demand was driven by customers continuing to move assets into clinical studies as well as new product launches.

The analyst mentions that despite changes in CFO last year affecting past profitability comments, ongoing margin growth and focus on cost control should reassure investors about prioritizing cash preservation. 

The narrative of growth and margin expansion, central to the Factory of the Future project, seems to be materializing. William Blair anticipates Twist’s momentum to persist, projecting revenue growth of over 20% and a gross margin expansion of over 700 basis points annually, continuing into 2025.

William Blair reiterates the Outperform rating.

Other analyst reaction:

• Baird analyst maintains an Outperform rating and raises the price target from $39 to $40.
• Barclays keeps an Overweight rating, with an increased price target from $40 to $45.
• Evercore ISI Group reiterates the Outperform rating, with a price target of $50, up from $46.

Price Action: TWST shares are up 29.5% at $41.46 at last check Friday.

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