What Needs To Be True To Buy Twist Bioscience Stock Now?
A $10,000 holding in Twist Bioscience (TWST) a year ago is worth about $66,600 today. The same sum in the S&P 500 would be worth about $11,700. The company sells made-to-order DNA to drug makers and research labs. Its sales grow fast, but it still loses money. The price now counts on that growth lasting and the losses ending. How much has to go right for that price to hold?
At 26.6 Times Sales, Much Must Go Right
A great deal, because Twist Bioscience’s market value is 26.6 times its sales over the past year. For the S&P 500 as a whole, that figure is 3.1. The usual price-to-earnings ratio does not work here, because the company has no earnings. Twist Bioscience’s price-to-sales ratio got this high because the share price rose far faster than sales did.
Twist Bioscience’s sales growth is real. Revenue grew 22% a year on average over the past three years, against 5.8% for the S&P 500. Profit is the weak side. Over the past year, the operating loss equaled 32% of sales. The S&P 500 as a whole kept 18.6% of sales as operating profit.
So the price is a bet on two things: where the growth comes from, and when the losses end.
Where Is Twist Bioscience’s Growth Coming From?
Management points mainly to drug developers using AI. In fiscal Q3 2026, revenue from drug developers rose 49% from a year earlier to $40.4 million. Management tied that rise to pharma, biotech and large tech companies using its products in drug discovery, including AI-enabled work. The company also raised its fiscal 2026 revenue forecast to $456 million to $457 million.
Management expects orders for AI-enabled drug discovery to at least double again in fiscal 2027. It says these projects are larger and start with formal service agreements, so customers share their plans early. That, management said, gives it more visibility than it had before.
Investors cannot yet size the AI business, though. Asked on the fiscal Q3 2026 call, management gave no AI revenue figure. It pointed to growth in sales to drug developers instead. A question on the same call noted that revenue from drug developers dipped slightly from the prior quarter. Management answered that it does not run the business for a single quarter.
Growth is only half of the bet; the other half is how soon Twist Bioscience reaches break-even.
Can Adjusted EBITDA Reach Break-Even In Fiscal Q4?
Management says it can. It expects adjusted EBITDA, an earnings measure that leaves out some costs, to reach break-even in fiscal Q4 2026. It also plans to hold that level through fiscal 2027. That goal is narrower than a net profit.
In fiscal Q3 2026, adjusted EBITDA was a loss of about $11.3 million. Management said that loss reflected planned one-time spending. Operating costs in the quarter included about $2 million in employee transition costs, plus other one-off items. Management expects those items to fall away, cutting operating costs by more than $5 million in fiscal Q4. The cut is smaller than the Q3 loss, so reaching break-even takes more than lower costs.
These shares have fallen harder than the market in past sell-offs, so a miss could hit them hard. In the 2025 tariff shock, the stock fell 41% from peak to trough, against 19% for the S&P 500.
The next marker comes in November, when management plans to give full-year guidance for fiscal 2027. The number to watch is adjusted EBITDA for that year. A forecast at break-even or better would back the case that adjusted EBITDA losses are ending. A forecast that pushes break-even further out would leave a price of 26.6 times sales with less support.
How To Act On TWST?
