Twist Bioscience stock prediction after plunging 8% on earnings miss

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on Nov 22, 2021
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  • Twist Bioscience stock on Monday plunged more than 8% after announcing its most recent quarterly results.
  • The company reported its Q4 results before markets opened, missing analyst expectations on earnings.
  • However, its revenue for the quarter marginally beat expectations after growing by 17% Y/Y.

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On Monday, Twist Bioscience Corp (NASDAQ:TWST) shares declined by more than 8% after announcing its fiscal fourth-quarter results. The company reported its most recent quarterly results before markets opened, missing the consensus analyst expectation on earnings per share. However, TWST marginally beat the Street revenue forecast after a double-digit Y/Y sales growth.

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Twist posted FQ4 GAAP EPS of -$0.84, missing the consensus Street forecast of -$0.79. However, revenue for the quarter surged by 17% from the same quarter a year ago to $37.95 million, surpassing expectations by $1.69 million. The company also announced the purchase of antibody discovery company Abveris for up to $190 million.

Is Twist Bioscience overvalued?

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From a valuation perspective, Twist Bioscience shares trade at a steep price-sales ratio of about 40.10 and a P/B ratio of about 8.16, making the stock less attractive to value investors.

However, analysts expect its bottom line to improve by about 8.90% this year. Therefore, the stock could potentially gain the attention of growth investors, especially following the purchase of Abveris.

The stock has plunged by nearly 24% this year, thus creating an entry opportunity.

Source – TradingView

Technically, Twist Bioscience shares seem to be trading within a sharply ascending channel formation in the intraday chart. As a result, the stock has declined to trade closer to the oversold conditions of the 14-day RSI.

Therefore, TWST could bounce off the trendline support creating an opportunity for upward profits.

Investors could target potential rebounds at about $110.05, or higher at $118.27. On the other hand, if the stock continues to plummet deep into oversold conditions, it could find support at about $95.65, or lower at $87.17.

A technical rebound could be on the money

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In summary, although Twist Bioscience stock trades at steep valuation multiples, thus restricting its upside potential, the recent pullback could be followed by a technical rebound.

Therefore, TWST could be a potential short-term buy.

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