Twist Bioscience (TWST) reports first-quarter loss, top revenue estimates

Twist Bioscience (TWST) came out with quarterly loss of $0.91 per share versus the Zacks Consensus Estimate of a loss of $1.08. For comparison, a year earlier the loss was $0.72 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of 15.74%. A quarter ago, it was expected that this maker of synthetic DNA for the biotechnology industry would post a loss of $0.80 per share when it actually produced a loss of $0.84, delivering a surprise of -5%.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

Twist Bioscience, which belongs to the Zacks Medical – Biomedical and Genetics industry, posted revenues of $42.02 million for the quarter ended December 2021, surpassing the Zacks Consensus Estimate by 10.48%. For comparison, revenues from the previous year amounted to $28.16 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Twist Bioscience shares have lost about 21.2% year to date compared with the S&P 500’s decline of -6.1%.

What’s next for Twist Bioscience?

While Twist Bioscience has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, Twist Bioscience’s estimate trend is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$1.15 on revenue of $46.18M for the coming quarter and -$4.79 on revenue of $189.05M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Medical Biomedical and Genetics industry is currently in the bottom 44% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One more company in the same industry, Alnylam Pharmaceuticals (ALNY), is yet to release results for the quarter ended December 2021. The results are expected to be released on February 10.

In the upcoming report, this RNA interference drugmaker is expected to report a quarterly loss of $1.47 per share, representing a year-over-year change of +29.7%. The consensus EPS estimate for the quarter has been revised upwards by 4.2% over the last 30 days to the current level.

Alnylam Pharmaceuticals’ revenue is expected to be $237.92 million, up 45.5% from the year-ago quarter.

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