News Flash: 9 Analysts Think Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) Earnings Are Under Threat

The analysts covering Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the nine analysts covering Ginkgo Bioworks Holdings provided consensus estimates of US$306m revenue in 2024, which would reflect a noticeable 2.9% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 33% to US$0.29 per share. However, before this estimates update, the consensus had been expecting revenues of US$350m and US$0.24 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Ginkgo Bioworks Holdings

The consensus price target fell 12% to US$3.52, implicitly signalling that lower earnings per share are a leading indicator for Ginkgo Bioworks Holdings' valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 2.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 38% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ginkgo Bioworks Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Ginkgo Bioworks Holdings' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ginkgo Bioworks Holdings analysts - going out to 2025, and you can see them free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.