On Tuesday, Baird reaffirmed its positive stance on Twist Bioscience (NASDAQ:TWST), maintaining an Outperform rating and a $48.00 price target. Currently trading at $50.30, the stock has shown remarkable momentum with an 8.55% gain in the past week. The firm's analyst highlighted the consistent pricing premiums for the company's Express Genes service, observing significant premiums in November.
According to InvestingPro data, TWST has delivered an impressive 103% return over the past year. According to the analyst, the average premium for academic clients was approximately 43% for the period from November 1, 2024, to November 30, 2024. For industry clients, the average was around 65% higher.
The analyst's observations are based on daily tracking of the pricing premiums for Twist Bioscience's Express Genes offering. This tracking is conducted to gauge the demand for the company's synthetic genes services. The noted premiums suggest that there is a strong demand for the company's offerings, particularly in the academic and industry sectors.
While Baird's analyst was cautious about drawing direct conclusions from this data to the overall revenue or gross margin percentage for Twist Bioscience, they indicated that the elevated pricing premiums could be viewed positively. The company maintains a healthy gross profit margin of 42.6% and has demonstrated strong revenue growth of 27.7% in the last twelve months, according to InvestingPro analysis.
This perspective is in terms of the thematic demand for the company's products, which may reflect broader market interest and the value placed on Twist Bioscience's services.
Twist Bioscience specializes in synthetic DNA production for various applications, including medical research, agricultural biology, and industrial chemicals. The company's Express Genes service offers rapid delivery of synthetic genes, which is a critical factor for research and development projects in both academic and industrial settings.
The reaffirmation of the Outperform rating and the $48.00 price target by Baird suggests confidence in the ongoing performance and future prospects of Twist Bioscience. This outlook is based on the observed pricing strategy and market demand for the company's synthetic genes offerings. Based on InvestingPro's Fair Value analysis, the stock appears to be trading above its intrinsic value. Investors seeking deeper insights can access comprehensive financial health metrics and 12 additional ProTips through InvestingPro's detailed research report, part of its coverage of over 1,400 US equities.
In other recent news, Twist Bioscience Corporation (NASDAQ:TWST) has been making significant strides with solid financial performances. 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.
TD Cowen has reaffirmed a Buy rating on Twist Bioscience, highlighting the company's solid financial guidance for fiscal year 2025, and Scotiabank (TSX:BNS) raised its price target for the company 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.
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