Key Highlights

  • TWST shares fell 4.70% pre-market to $136.00 from a $142.70 prior close.
  • Target increases: TD Cowen to $190, Guggenheim to $212, Canaccord to $205.
  • Price-to-sales sits near 20x versus about 10.8x for biotech peers.
  • The next earnings report is estimated for November 13.

Pause After a Sharp Rally

Twist Bioscience (NASDAQ:TWST) shares fell 4.70% pre-market today to $136.00, down $6.70 from the prior close of $142.70. The stock rose 2.10% on Tuesday, trading between $134.94 and $148.83, and the pre-market dip looks like a pause after a sharp multi-day rally.

The stock has drawn attention after a run of analyst target increases: TD Cowen to $190 from $115, Guggenheim to $212 and Canaccord to $205. A rotation into the health sector sent the XLV ETF to a record high on Tuesday, though XLV is down about 0.9% pre-market. Better-than-expected results from Danaher (NYSE:DHR) added some life-science tools context.

Valuation Is the Debate

One valuation estimate puts the price-to-sales ratio near 20x versus about 10.8x for biotech peers. The company is still loss-making, with EPS of negative $2.22, and it priced an upsized $300 million offering in August. The 52-week range runs from $23.30 to $219.71, so the stock trades well above its low but below its high.

Business Snapshot

Twist Bioscience, based in South San Francisco, manufactures synthetic DNA on a proprietary silicon-based platform that miniaturizes DNA synthesis chemistry, allowing high throughput, speed and lower cost than traditional plate-based methods. Its portfolio includes synthetic genes, oligo pools, NGS target enrichment and sample preparation tools, variant libraries, synthetic RNA controls, and antibody discovery and biopharma services.

The company has partnerships with Boehringer Ingelheim and Lilly TuneLab. It reports revenue of more than $430 million over the last twelve months, gross margins above 50% and a path toward adjusted EBITDA breakeven, and it has 979 employees. Volume was 2.02 million shares in the last session.

Next Up: November 13 Earnings

The next earnings report is estimated for November 13, when investors will weigh growth against the stock's rich valuation.