Newsflash: Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) Analysts Have Been Trimming Their Revenue Forecasts

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 this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from seven analysts covering Ginkgo Bioworks Holdings is for revenues of US$232m in 2024, implying a perceptible 7.8% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 31% to US$0.31. However, before this estimates update, the consensus had been expecting revenues of US$280m and US$0.30 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.

View our latest analysis for Ginkgo Bioworks Holdings

The consensus price target fell 36% to US$1.97, 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 7.8% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 27% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.4% per year. 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 this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Ginkgo Bioworks Holdings after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ginkgo Bioworks Holdings analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.