Why Ginkgo Bioworks Stock Is Down After Earnings

Ginkgo Bioworks Holdings, Inc. DNA shares are trading lower Friday after the company posted worse-than-expected fourth-quarter results and issued disappointing guidance.

The Details:

The company reported quarterly losses of 11 cents per share which missed the analyst consensus estimate of losses of 10 cents. Quarterly sales came in at $34.76 million, below the analyst consensus estimate of $42.5 million by 18.22 and a 64.64% decrease from sales of $98.28 million year-over-year. 

Ginkgo said the decrease in sales was primarily driven by the expected ramp down of K-12 testing in Ginkgo’s Biosecurity segment and the impact of Cell Engineering downstream value share from equity milestones in 2022 that did not recur in 2023.

“2023 was a breakout year for Ginkgo,” said Jason Kelly, CEO of Ginkgo. 

“We’re working to build a durable platform that fundamentally transforms R&D in biotech. I’m particularly pleased with our growth in biopharma, which represents our largest untapped market – we added several new programs across modalities with large enterprises including Boehringer Ingelheim, Merck, Novo Nordisk, and Pfizer and are seeing strong momentum in pharma going into 2024," Kelly added. 

Outlook: 

Ginkgo expects to add 100-120 new Cell Programs to the Cell Engineering platform in 2024 and total revenue of between $215 million and $235 million for the year, below the $279.546 million consensus estimate.  

TD Cowen maintained its Outperform rating on Ginkgo Bioworks and lowered its price target from $7 to $3 following the print. 

Related News: Dell Reports Better-Than-Expected Q4 Results Driven By AI Server Demand

DNA Stock Prediction 2024:

Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.

Shares of Ginkgo Bioworks Holdings have an average 1-year price target of $1.73, representing an expected upside of 35.16%.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. 2 analysts have bearish recommendations on Ginkgo Bioworks Holdings, while 1 analysts have bullish ratings. The street high price target from TD Cowen is $3, while the street low from Goldman Sachs is $1.10.

DNA Price Action: According to Benzinga Pro, Ginkgo Bioworks shares are down 14.5% at $1.30 at the time of publication.

Image: Alexey Hulsov from Pixabay