Shareholders will be ecstatic, with their stake up 35% over the past week following Twist Bioscience Corporation's (NASDAQ:TWST) latest third-quarter results. Revenue of US$118m came in 3.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.56, a 16% miss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Twist Bioscience's ten analysts are now forecasting revenues of US$539.2m in 2027. This would be a huge 25% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 32% to US$1.48. Before this earnings announcement, the analysts had been modelling revenues of US$520.0m and losses of US$1.45 per share in 2027.
See our latest analysis for Twist Bioscience
The consensus price target rose 13% to US$104, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Twist Bioscience at US$120 per share, while the most bearish prices it at US$36.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Twist Bioscience's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Twist Bioscience'shistorical trends, as the 19% annualised revenue growth to the end of 2027 is roughly in line with the 22% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 23% per year. So although Twist Bioscience is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Twist Bioscience will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Twist Bioscience that you should be aware of.
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