On Tuesday, Twist Bioscience (NASDAQ:TWST), a company specializing in synthetic DNA, maintained its Buy rating and a stock price target of $58.00, as reaffirmed by TD Cowen. The endorsement comes with an optimistic outlook for the company's future, highlighting Twist Bioscience as TD Cowen's top pick for 2025.
The firm's confidence in Twist Bioscience is based on the company's solid financial guidance for fiscal year 2025, which follows a successful performance in fiscal year 2024. According to the analyst, the guidance should provide reassurance to investors about the company's sustainable growth and the continued improvement of its profit margins.
TD Cowen attributes the positive projection to management's proven track record and competency in execution, which they believe will contribute to a reduction in the 16% short interest in the stock. The growth of next-generation sequencing (NGS) is identified as a primary growth driver for Twist Bioscience.
Furthermore, the analyst points out that Twist Bioscience's proprietary enzyme production is a key, yet underappreciated, factor that will likely contribute to gross margin improvements and product enhancements in the long term. This aspect of the business is expected to provide a tailwind to the company's performance.
In summary, TD Cowen has reiterated its Buy rating on Twist Bioscience with a price target of $58.00, signaling confidence in the company's revenue and gross margin outlook for fiscal year 2025 and beyond. The firm believes that the company's strong management and innovative approach to enzyme production will continue to positively influence its stock value.
In other recent news, Twist Bioscience Corporation (NASDAQ:TWST) has been making significant strides. The company's fiscal year 2024 concluded with a robust performance, highlighted by a 27% increase in Q4 revenues to $84.7 million, and a total annual revenue growth of 28% reaching $330 million.
The performance led to Scotiabank (TSX:BNS) raising its price target for Twist Bioscience to $54, maintaining a Sector Outperform rating. Baird also maintained an Outperform rating and increased the price target to $48.
Twist Bioscience's gross margin guidance for the quarter was exceeded, achieving 45.1%, and an annual gross margin improvement to 42.6% was noted. 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. The company's strong financial position is further bolstered by a $15 million upfront payment received from Xoma (NASDAQ:XOMA) as part of a royalty purchase agreement. These are among the recent developments that continue to shape the future of Twist Bioscience.
InvestingPro Insights
Recent data from InvestingPro adds depth to TD Cowen's optimistic outlook on Twist Bioscience (NASDAQ:TWST). The company's market capitalization stands at $2.75 billion, reflecting investor confidence in its growth potential. Twist's revenue growth of 27.69% over the last twelve months aligns with the analyst's positive view on the company's sustainable growth trajectory.
InvestingPro Tips highlight that Twist Bioscience has seen a significant return over the last week and a strong return over the last month, with the stock price up 12.29% and 14.29% respectively. This recent momentum supports TD Cowen's designation of TWST as a top pick for 2025. Additionally, the company operates with a moderate level of debt, which could provide financial flexibility as it pursues growth opportunities in the NGS market.
It's worth noting that InvestingPro offers 7 additional tips for Twist Bioscience, providing investors with a more comprehensive analysis of the company's financial health and market position.
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