Is Twist Bioscience Stock Built to Withstand More Downside?
Twist Bioscience (TWST) stock is down 10.1% in a day. The recent slide reflects renewed concerns around wider-than-expected losses and unclear profitability guidance, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Twist Bioscience stands today.
- Size: Twist Bioscience is a $1.6 Bil company with $362 Mil in revenue currently trading at $26.87.
- Fundamentals: Last 12 month revenue growth of 22.7% and operating margin of -39.3%.
- Liquidity: Has Debt to Equity ratio of 0.05 and Cash to Assets ratio of 0.39
- Valuation: Twist Bioscience stock is currently trading at P/E multiple of -18.9 and P/EBIT multiple of -9.5
These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced.
That brings us to the key consideration for investors worried about this fall: how resilient is TWST stock if markets turn south? While we like to buy dips when the fundamentals check out (see Buy or Sell TWST Stock) – we stay wary of potential falling knives.
This is where our downturn resilience framework comes in. Suppose TWST stock falls another 20-30% to $19 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Stock picking can fail no matter how good the strategy is. High Quality Portfolio turns single-stock insights into a robust market beating portfolio strategy.
Below are the details, but before that, as a quick background: TWST provides synthetic DNA products and services, including DNA synthesis on silicon chips, synthetic genes, sample preparation tools, antibody libraries, and DNA-based digital data storage solutions.
2022 Inflation Shock
- TWST stock fell 94.5% from a high of $207.97 on 20 January 2021 to $11.49 on 2 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $58.88 on 23 July 2024 , and currently trades at $26.87
| TWST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -94.5% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- TWST stock fell 43.9% from a high of $35.15 on 6 March 2020 to $19.71 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 6 May 2020
| TWST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -43.9% | -33.9% |
| Time to Full Recovery | 49 days | 148 days |
2018 Correction
- TWST stock fell 47.6% from a high of $31.08 on 6 December 2018 to $16.30 on 21 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 23 April 2019
| TWST | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -47.6% | -19.8% |
| Time to Full Recovery | 123 days | 120 days |
It is a good thing to keep in mind how low TWST could go during a downturn. And you should also check how the stock fared when compared with the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.