Twist Biosciences Update from Ark Invest
Twist Biosciences is a company that manufactures synthetic DNA. I've been holding their stock and keeping tabs on them for a while now. (Here are previous memos I've written about them).

Today $TWST was down 20%, so I thought I'd post this update from Ark Invest's weekly commentary:Post media

"Twist Bioscience (TWST) fell approximately 17% on Friday after reporting fiscal first quarter results that outperformed analysts’ expectations on both the top and bottom lines but leaving 2021 revenue guidance unchanged. Moreover, its new manufacturing facility in Oregon could prevent gross margin expansion in 2021.

Our confidence in Twist remains unchanged for multiple reasons. The company's investments in capacity should contribute to margin expansion over the long-term, galvanized by secular growth in the synthetic biology and liquid biopsy markets. In addition, we believe Twist's data-driven approach to target enrichment for next-generation sequencing (NGS) is best-in-class, especially for more esoteric biomarkers such as DNA methylation which are difficult to detect in liquid biopsies."
Bruno Santos's avatar
Hi Nathan ,
They also mention about Codeaxis. Do you have any memo about ?
Thanks 🙏
Nathan Worden's avatar
I haven't looked into Codeaxis yet, but I may do a future memo about it.

For those of you out there who are curious, the blerb that Bruno is referring to that Ark put in their update is this:

"Codexis ($CDXS), a protein engineering company, closed up 15% on Tuesday (2/2/21) perhaps because of increased investor confidence in its protein engineering platform, CodeEvolver. Recently, Google’s Deep Mind announced AlphaFold, a neural network-based algorithm that can predict protein folding, causing elevated interest in the space."
Bruno Santos's avatar
Thanks Nathan 🙌🏻
Frank's avatar
If it’s a fundamentally strong buy and it just dipped by that much, sounds like it’s a great time to buy. Any reason not to?
Nathan Worden's avatar
Here would be the bear case (which I like that you ask, because it's always important to consider):

Twist Biosciences shares have skyrocketed more than 600%(!) over the last 12 months. So even after a 20% correction you can still argue that it is over-valued. J.P. Morgan's analyst Tycho Peterson makes that exact case and set his price target at $100, which would be a 36% drop from here.

Tycho is a smart guy, but I sense that his price target is looking at the short term (within the next year to 18 months)

My investment strategy is looking at the next five years, and I think the applications of synthetic DNA will justify this super high valuation in that longer time frame.

Timeframe is super important to consider. If you have a long, 5 year outlook, this could be a time to buy.

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