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On Monday, Twist Bioscience Corporation (NASDAQ:TWST) received reaffirmation of a Buy rating and a steady price target of $58.00 from TD Cowen, highlighting the company’s strong positioning and resilience to industry challenges. According to InvestingPro data, two analysts have recently revised their earnings upward for the upcoming period, with analyst targets ranging from $40 to $62. Twist Bioscience is recognized for its insulation from prevalent headwinds affecting the Tools sector, such as tariffs and fluctuating funding from the National Institutes of Health (NIH).
TD Cowen’s analysis indicates that Twist Bioscience’s comprehensive manufacturing within the United States, coupled with a low exposure to China (accounting for only 1.5% of Q2 sales), minimizes the impact of tariffs on the company’s performance. Additionally, despite academia representing 18% of Q2 sales, with approximately half of that being U.S.-based, the company’s NIH exposure remains below 2%. The company’s strong financial position is reflected in its impressive current ratio of 4.96, indicating robust liquidity to meet short-term obligations.
A significant development for Twist Bioscience is the spinout of its DNA data storage division into an independent entity named Atlas Data Storage, which has secured $155 million in seed financing from prominent investors. This strategic move allows Twist Bioscience to maintain potential upside as a minority equity holder with downstream economics, while also alleviating the financial load of R&D expenses from its core operations.
The company’s management has confidently integrated the effect of tariffs into their guidance, ensuring negligible repercussions due to their U.S.-centric production and supply chain. This strategic positioning is expected to contribute to Twist Bioscience’s pursuit of Adjusted EBITDA breakeven.
With the race to Adjusted EBITDA breakeven in progress, TD Cowen expresses confidence in Twist Bioscience’s growth drivers and operational leverage, which are anticipated to guide the company towards achieving this financial milestone. InvestingPro analysis reveals strong revenue growth of 25.85% in the last twelve months, though the company maintains a moderate debt level with a debt-to-equity ratio of 0.18. For deeper insights into TWST’s financial health and growth prospects, including 6 additional ProTips and comprehensive valuation metrics, explore the full Pro Research Report available on InvestingPro.
In other recent news, Twist Bioscience Corp reported record revenue for the second quarter of fiscal year 2025, achieving $92.8 million, marking a 23% year-over-year increase. Despite missing the earnings per share (EPS) forecast with a reported -$0.66 against the expected -$0.61, the company’s revenue exceeded projections, contributing to a positive market reaction. Twist Bioscience has provided full-year revenue guidance of $372-$379 million, anticipating continued growth. The company also announced the spin-off of its DNA Data Storage division into an independent entity named Atlas Data Storage, which received a significant $155 million investment from various partners. This move allows Twist to maintain a 24% equity interest and benefit from future royalties and milestone payments. Analyst firms have not issued new ratings, but the company’s strategic initiatives and operational improvements have been noted. Twist Bioscience’s gross margin improved to 49.6%, up from 41% the previous year, reflecting enhanced operational efficiency.
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