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On Monday, Evercore ISI made adjustments to Twist Bioscience’s financial outlook, reducing the price target on the company’s shares from $52.00 to $50.00. Despite the price target cut, the firm maintained its Outperform rating on the (NASDAQ:TWST) stock, which currently trades at $36.67. According to InvestingPro data, analyst targets range from $40 to $62, with the stock currently appearing fairly valued based on InvestingPro’s Fair Value model. The decision follows a review of the company’s second-quarter performance, which showed revenues increasing by 23% to $92.8 million, slightly above the Street’s expectations.
Twist Bioscience’s second-quarter growth was characterized by a 21% rise in Synthetic Biology (SynBio) and a 25% increase in Next (LON:NXT) Generation Sequencing (NGS) revenues, with the latter being approximately 1% higher than the Street’s forecasts. The Biopharma segment also contributed with $5.7 million in revenues. Gross margins for the quarter stood at 49.6%, surpassing the Street’s estimates by around 100 basis points. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 4.96 and operates with moderate debt levels. However, this was counterbalanced by higher stock-based compensation expenses, resulting in an adjusted EBITDA loss of $14.8 million, which was in line with Street estimates.
Looking ahead, Twist Bioscience reiterated its fiscal year 2025 revenue guidance, projecting between $372 million and $379 million, with segment outlooks remaining steady. The company’s SynBio segment is expected to generate between $144 million and $147 million, NGS between $205 million and $209 million, and Biopharma around $23 million. The gross margin forecast was slightly improved by 50 basis points to approximately 49.5%. The adjusted EBITDA forecast was also updated, with anticipated losses narrowing from between $60 million and $55 million to between $53 million and $48 million. InvestingPro subscribers can access additional insights, including 6 more ProTips and a comprehensive analysis of Twist Bioscience’s financial health, which currently rates as GOOD according to InvestingPro’s scoring system.
For the third quarter of fiscal year 2025, Twist Bioscience anticipates revenues ranging from $94 million to $97 million, which brackets the Street’s expectations. This includes SynBio revenues of $37 million to $39 million, which is about 3% above the Street’s midpoint predictions, and NGS revenues of $51 million to $52 million, which is roughly 1.6% below. Biopharma revenues are forecasted to be $6 million. Additionally, the company expects an adjusted EBITDA loss of $13 million for the third quarter, which would be a sequential improvement from the second quarter. The gross margin for the second half of the year is projected to exceed 50%.
In other recent news, Twist Bioscience Corporation reported a record revenue of $92.8 million for the second quarter of fiscal year 2025, marking a 23% increase compared to the same period last year. Despite an earnings per share (EPS) of -$0.66, which fell short of the forecasted -$0.61, the company remains optimistic with a full-year revenue guidance of $372-$379 million. The company aims to reach EBITDA breakeven by the end of fiscal 2026, reflecting its strategic focus on growth and efficiency.
A notable development is the spinout of Twist Bioscience’s DNA data storage division into a separate entity named Atlas Data Storage, which has secured $155 million in seed financing. This move allows Twist Bioscience to maintain a minority equity stake while reducing R&D expenses. Analyst firm TD Cowen reaffirmed its Buy rating for the company, maintaining a price target of $58, citing the company’s strong positioning and low exposure to tariffs and NIH funding.
Twist Bioscience’s strategic initiatives, such as increased production capacity and automation, have contributed to improved operational efficiency, with gross margins rising to 49.6%. The company also experienced significant growth in its Synbio and NGS segments, with revenues increasing by 21% and 25%, respectively. These recent developments underscore Twist Bioscience’s continued efforts to enhance its operational leverage and pursue growth opportunities in the market.
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