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On Monday, Barclays (LON:BARC) analyst Luke Sergott increased the price target on Twist Bioscience shares, trading on (NASDAQ:TWST), from $52.00 to $58.00, while reiterating an Overweight rating. The stock, currently trading at $52.75, has demonstrated strong momentum with a 43% return over the past year, according to InvestingPro data. Sergott’s optimism is fueled by the company’s growing momentum, particularly in its Express portfolio and Next-Generation Sequencing (NGS) tools. These tools are expected to see increased adoption as liquid biopsy tests continue to ramp up and commercialize. This optimism is supported by the company’s impressive 27.7% revenue growth over the last twelve months.
The analyst anticipates that gross margins (GMs), currently at 42.6%, could surpass guidance, albeit at a slower pace. Sergott also highlighted the potential for significant technological milestones and pilot commercial programs in DNA storage within the current year. He noted the company’s minimal cash burn, which is particularly noteworthy given the investments required to sustain business momentum. InvestingPro analysis shows the company maintains a healthy current ratio of 4.88, indicating strong liquidity to support its growth initiatives.
Barclays’ continued recommendation to buy on dips is based on the belief that management will likely avoid the need to raise public market funds in the near future. Sergott’s revised price target of $58 is grounded on an 8x enterprise value to revenue (EV/Revs) multiple on the company’s estimated 2025 revenue of $377 million, a slight increase from the previous estimate of $376 million.
Twist Bioscience’s strategic focus on its core portfolio, coupled with its cost-effective management of investments, has positioned it favorably in the eyes of Barclays analysts. Investors are encouraged to consider the company’s stock for potential growth as it continues to innovate and expand its product offerings in the biotechnology sector.
In other recent news, Twist Bioscience concluded its fiscal year 2024 with a robust performance, demonstrating a 27% increase in Q4 revenues to $84.7 million, and a total annual revenue growth of 28% reaching $330 million. Analysts from Baird, TD Cowen, and Scotiabank (TSX:BNS) reaffirmed their positive stance on the company, with Baird maintaining an Outperform rating and a $48.00 price target, TD Cowen holding a Buy rating and a $58.00 price target, and Scotiabank raising its price target to $54 and maintaining a Sector Outperform rating. The analysts’ confidence in Twist Bioscience is based on the company’s strong financial performance, solid financial guidance for fiscal year 2025, and the observed pricing strategy and market demand for the company’s synthetic genes offerings. Twist Bioscience also exceeded its gross margin guidance for the quarter, achieving 45.1%, and saw an annual gross margin improvement to 42.6%. The company’s initial guidance for FY25 anticipates revenue growth between 17% to 20% year-over-year, largely driven by the Next (LON:NXT) Generation Sequencing (NGS) and Synthetic Biology (SynBio) sectors. Twist Bioscience is also expected to improve its adjusted EBITDA by roughly $30 million year-over-year. These are among the recent developments shaping the future of Twist Bioscience.
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