California-based Twist Bioscience Corp (TWST) provides synthetic DNA. The company sees huge growth potential ahead. It recently acquired iGenomX and entered into a strategic partnership with a subsidiary of Regeneron (REGN) as it seeks to capitalize on its opportunities.
Let’s take a look at the company’s latest financial performance, corporate developments, and risk factors.
Twist Bioscience’s Q3 Financial Results and 2021 Guidance
The company reported revenue of $35 million for its Fiscal 2021 Q3 ended June 30, compared to revenue of $21.2 million in the same quarter last year. Consensus estimates called for revenue of $32.27 million.
Twist posted a loss per share of $0.82, which widened from $0.67 a year ago and came in worse than consensus expectations for a loss of $0.75. Twist ended Q3 with $519.4 million in cash. (See Twist Bioscience stock charts on TipRanks).
For Fiscal 2021, the company raised its revenue guidance to a range of $129 million – $132 million. It previously anticipated full-year revenue in the range of $121 million – $129 million. The company cautions that its financial outlook is subject to certain risks.
Twist Bioscience’s Corporate Developments
During Q3, the company launched the Twist Library Preparation Enzymatic Fragmentation Kit 2.0, which it says is optimized for challenging next-generation sequencing applications.
Twist has also struck a partnership deal with Regeneron Genetics Center to focus on assay production. They will collaborate to produce custom assays for population genomics studies.
Twist Bioscience’s Risk Factors
The new TipRanks Risk Factors tool shows 60 risk factors for Twist Bioscience. Since filing its Fiscal 2020 annual report, the company has updated its risk profile to introduce one new risk factor under the Macro and Political category.
Twist Bioscience cautions investors about the ongoing uncertain effects of the U.K.’s decision to exit the E.U. Although there is a Brexit trade deal in place, Twist continues to assess how the deal could impact its U.K. and European operations. For example, it is evaluating the deal’s potential impact on the U.K.’s biotechnology industry, its ability to ship products into the U.K., and on its customers’ capital planning. So far, Twist has not experienced any significant financial impact since Brexit, however, the company tells investors that Brexit could adversely affect its business in the future.
Finance and Corporate is Twist Bioscience’s top risk category, accounting for 28% of the total risks. That is below the sector average at 29%. Twist’s shares have declined about 17% since the beginning of 2021.
Analysts’ Take
In August, Robert W. Baird analyst Catherine Ramsey Schulte reiterated a Buy rating on Twist Bioscience stock but lowered the price target to $130 from $140. Schulte’s new price target suggests 11.07% upside potential.
The analyst’s decision to lower the price target arises from near-term concerns regarding Twist’s revenue volatility. For the long-term, however, the analyst sees a compelling opportunity.
Consensus among analysts is a Moderate Buy based on 2 Buys and 2 Holds. The average Twist Bioscience price target of $120 implies 2.53% upside potential to current levels.
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