Twist Bioscience Corp (TWST, Financial) has experienced a remarkable surge in its stock price, with a 13.26% gain over the past week and an impressive 111.21% gain over the past three months. The company's market capitalization now stands at $2.11 billion, with the current stock price at $36.56. Despite this upward trajectory, the GF Value suggests caution, labeling the stock as a Possible Value Trap and advising investors to think twice before making a move. The GF Value is currently set at $61.45, down from a past GF Value of $83.06, indicating a shift in the perceived intrinsic value of the company.
Overview of Twist Bioscience Corp
Twist Bioscience Corp operates within the Medical Diagnostics & Research industry, focusing on the development of a synthetic DNA synthesis platform. This innovative technology is designed to industrialize the engineering of biology, offering a faster and more cost-effective method for producing high-quality synthetic DNA. The company's approach, which synthesizes DNA on silicon rather than traditional plastic plates, aims to revolutionize the field and provide researchers with the tools needed to advance their work swiftly. The majority of Twist Bioscience's revenue is generated in the United States, reflecting its strong presence in the domestic market.
Assessing Profitability
Twist Bioscience's Profitability Rank is currently at a low 2 out of 10, with an Operating Margin of -84.41%, which, while negative, is better than 26.55% of 226 companies in the industry. The company's ROE stands at -29.06%, ROA at -23.73%, and ROIC at -48.81%, each metric indicating challenges but still outperforming a portion of their industry peers. These figures highlight the company's current struggle to achieve profitability amidst its growth and expansion efforts.
Growth Prospects
Twist Bioscience's Growth Rank is more promising at 6 out of 10. The company has demonstrated a solid 3-Year Revenue Growth Rate per Share of 23.30% and an even more robust 5-Year Revenue Growth Rate per Share of 31.70%, both of which are better than the majority of their industry counterparts. However, the 3-Year and 5-Year EPS without NRI Growth Rates are negative at -3.10% and -4.70%, respectively, indicating that while revenue is growing, profitability is not keeping pace. This discrepancy suggests that while the company is expanding, it has yet to translate increased revenue into net earnings effectively.
Influential Shareholders
Notable shareholders in Twist Bioscience include Catherine Wood (Trades, Portfolio), holding 7,213,257 shares, representing a significant 12.48% share percentage. Baillie Gifford (Trades, Portfolio) follows with 1,094,758 shares, accounting for 1.89% of the company, and Joel Greenblatt (Trades, Portfolio) with a modest 42,598 shares, or 0.07%. The involvement of these prominent investors may provide a level of confidence in the company's potential, influencing the stock's performance and possibly signaling a positive outlook to other investors.
Competitive Landscape
When compared to its competitors, Twist Bioscience stands out with a market cap of $2.11 billion, significantly higher than OPKO Health Inc (OPK, Financial) at $696.225 million, Fulgent Genetics Inc (FLGT, Financial) at $731.937 million, and closely trailing Myriad Genetics Inc (MYGN, Financial) at $1.91 billion. This positioning reflects Twist Bioscience's competitive edge and market presence within the Medical Diagnostics & Research industry, suggesting that it is a key player among its peers.
Concluding Analysis
In conclusion, Twist Bioscience Corp's stock performance has been impressive in recent months, with substantial gains that have caught the attention of investors. However, the company's current GF Valuation advises caution, and its profitability metrics, though better than some industry peers, indicate significant room for improvement. The company's growth rates in revenue are strong, but this has not yet translated into positive earnings growth. The presence of influential shareholders may provide some level of reassurance, but it is essential to consider the competitive landscape and the company's positioning within its industry. Ultimately, while the stock's recent rally is notable, investors should carefully weigh the company's growth prospects against its current valuation and industry dynamics before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
