Twist Bioscience Corporation (NASDAQ:TWST) Analysts Are Pretty Bullish On The Stock After Recent Results
A week ago, Twist Bioscience Corporation (NASDAQ:TWST) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It looks like a positive result overall, with revenues of US$71m beating forecasts by 5.8%. Statutory losses of US$0.75 per share were 5.8% smaller than the analysts expected, likely helped along by the higher revenues. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Twist Bioscience
Following the latest results, Twist Bioscience's nine analysts are now forecasting revenues of US$293.1m in 2024. This would be a solid 12% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 14% from last year to US$3.07. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$289.5m and losses of US$2.95 per share in 2024. So it's pretty clear consensus is mixed on Twist Bioscience after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.
Although the analysts are now forecasting higher losses, the average price target rose 9.3% to 35.66667, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Twist Bioscience, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$25.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Twist Bioscience's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 36% p.a. growth over the last five years. Compare this to the 596 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 15% per year. So it's pretty clear that, while Twist Bioscience's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Twist Bioscience. Long-term earnings power is much more important than next year's profits. We have forecasts for Twist Bioscience going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Twist Bioscience , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
