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Twist Bioscience Drops Most in 10 Months After JPMorgan Downgrade

Twist Biosciences was downgraded on valuation concerns at JPMorgan despite topping Wall Street consensus estimates.
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Shares of Twist Bioscience  (TWST)  dropped 20% Friday, marking the sharpest decline for the synthetic DNA maker in 10 months, after JPMorgan downgraded the stock to underweight from neutral. 

The downgrade came after the company reported its quarterly results after the market close on Thursday. The stock has soared over 650% in the past 12 months and despite the company's earnings and revenue beat, analyst Tycho Peterson downgraded the stock. 

"We are hard pressed to handicap the 61.6x calendar 2022 sales valuation," Peterson said in an analyst note, according to Bloomberg. 

Twist shares were down 20.1% to $158.02 on Friday. JPMorgan placed a $100 price target on the stock, implying a 49% decline from its closing price on Thursday. 

Peterson noted that the stock was twice as expensive as synthetic biology peers Guardant Health  (GH)  and 10x Genomics  (TXG)

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Twist reported a net loss of 72 cents per share, a 28% improvement over the year ago quarter and ahead of Wall Street's expectations of a loss of 74 cents per share. 

Revenue for the period jumped by 64% to $28 million, which topped estimates of $25 million. 

The South San Francisco-based company expects fiscal 2021 sales between $110 million and $118 million while Wall Street estimates revenue of $116 million. 

Shares were down 5.5% in the past five session before Friday's drop, but this was the steepest the stock has fallen since March of 2020. 

Trading volume on Friday was heavy at about 2.6 million shares at last check, well ahead of the stock's three-month daily average of 736,000.