Ginkgo Bioworks Holds Strong Amid Revenue Surge and Program Adjustments Ginkgo Bioworks Holds Strong Amid Revenue Surge and Program Adjustments

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By Ronald Tech

Preliminary Sales and Revenue Insights

On Wednesday, Ginkgo Bioworks Holdings Inc (NYSE:DNA) released preliminary FY23 sales of $250 million-$260 million, compared to the consensus of $258.65 million.

Preliminary cell engineering and biosecurity revenue are expected to be within the disclosed guidance range of $145 million-$150 million and up to $110 million in 2023, respectively.

New Cell Programs are expected to be within the previously disclosed guidance range of 80-85 new Cell Programs added to the platform in 2023.

Analyst Evaluation and Industry Positioning

William Blair sees Ginkgo’s recent update as positive, despite reducing its full-year program target from 100. The accelerated pace of program announcements is linked to a new success-based pricing model and operational enhancements.

Ginkgo also completed the program’s pilot phase with Novo Nordisk A/S (NYSE:NVO) and completed a gene therapy collaboration with Biogen Inc (NASDAQ:BIIB).

Pharmaceutical Partnerships and Financial Strength

Ginkgo’s ability to combine automated data generation at scale with AI models targeted toward customer program areas is expected to be the foundation for additional pharmaceutical partnerships in 2024.

Ginkgo ended 2023 with nearly $950 million of cash and cash equivalents.

Ginkgo reported over 50% growth in cell engineering revenue from biopharma clients in 2023, reflecting market strength despite uncertain macro conditions.

Market Valuation and Industry Projection

The current valuation of Ginkgo’s shares is at 10.3 times their projected 2024 cell engineering sales target. This valuation is a premium compared to other high-growth life science tools peers.

William Blair believes Ginkgo is establishing itself as a leading horizontal platform in synthetic biology, aiming to democratize cell programming access. However, concerns persist regarding the feasibility of growth expectations and the path toward a more robust financial model. Consequently, William Blair keeps the Market Perform.

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Market Performance

Price Action: DNA shares are down 5.30% at $1.43 on the last check Wednesday.