Twist Bioscience Plunges 15.1%, What’s Fueling This Sharp Selloff?

Summary
• Twist Bioscience (TWST) slumps 15.1% to $28.615, breaching its 52-week low of $27.12
• Q3 earnings report highlights $0.47/share loss, narrowly beating estimates but underscoring sector headwinds
• Biotech sector sees mixed momentum, with Illumina (ILMN) rising 2.9% while TWST’s 200-day MA at $40.93 looms as a distant resistance

Twist Bioscience’s 15.1% intraday freefall has drawn urgent attention, with shares trading below $28.62 amid a bearish technical backdrop. The stock’s collapse follows a Q3 earnings report that, while slightly better than expected, failed to assuage concerns about long-term guidance and sector-wide challenges. As the biotech sector grapples with regulatory scrutiny and shifting investor sentiment, TWST’s sharp move raises critical questions about its near-term trajectory.

Q3 Earnings Disappointment and Sector-Wide Biotech Weakness
Twist Bioscience’s 15.1% selloff reflects a combination of earnings underperformance and broader sector pressure. While the company reported a $0.47/share loss—better than the $0.54 estimate—its revenue of $96.06M, though above expectations, failed to inspire confidence. Management’s muted guidance and a Zacks Rank 3 (Hold) signal tempered expectations. Compounding this, the biotech sector faces headwinds from regulatory scrutiny (e.g., Allogene’s CAR-T trial setback) and declining investor appetite for speculative growth plays. TWST’s intraday low of $27.54 suggests a fragile short-term outlook, with bearish momentum reinforced by a 30.34 RSI and MACD (-0.31) below the signal line.

Biotech Sector Struggles as Illumina Outperforms
The biotech sector has seen mixed performance, with Illumina (ILMN) rising 2.9% as a relative outperformer. However, TWST’s 15.1% drop highlights its vulnerability to sector-wide headwinds, including regulatory risks and declining R&D momentum. While ILMN’s gains reflect strength in genomic sequencing demand, TWST’s synthetic DNA focus appears overshadowed by broader market skepticism toward biotech’s long-term value proposition. This divergence underscores TWST’s need to differentiate its growth narrative amid sector consolidation and shifting capital allocations.

Bearish Positioning and ETF Alignment in a Volatile Biotech Climate
• 200-day average: $40.93 (far above current price)
• RSI: 30.34 (oversold territory)
• MACD: -0.31 (bearish divergence)
• Bollinger Bands: $33.04–$39.05 (price at lower bound)

Twist Bioscience’s technicals signal a deepening bearish trend, with RSI in oversold territory and price near its 52-week low. Key support levels at $27.54 (intraday low) and $25.00 (2025-09-19 put strike) could dictate near-term direction. The ARKG ETF (up 0.76%) and IDNA (up 0.09%) show modest gains, but TWST’s volatility aligns more with aggressive short-term options strategies. For a 5% downside scenario (ST = $27.18), payoff calculations suggest:

TWST20250815P30:
• Code: TWST20250815P30
• Type: Put
• Strike Price: $30
• Expiration: 2025-08-15
• IV: 101.07% (high volatility)
• Leverage Ratio: 9.66%
• Delta: -0.5728 (deep in-the-money)
• Theta: -0.0174 (moderate decay)
• Gamma: 0.0751 (sensitive to price moves)
• Turnover: 1,730 (liquid)
• Payoff: $2.82 (K - ST = $30 - $27.18)
• Why: High IV and leverage amplify potential returns if the selloff accelerates before August 15.

TWST20250815P27.5:
• Code: TWST20250815P27.5
• Type: Put
• Strike Price: $27.5
• Expiration: 2025-08-15
• IV: 45.62% (moderate)
• Leverage Ratio: 56.97%
• Delta: -0.3143 (moderate sensitivity)
• Theta: -0.0015 (low decay)
• Gamma: 0.1506 (high sensitivity to price moves)
• Turnover: 0 (thin)
• Payoff: $0.32 (K - ST = $27.5 - $27.18)
• Why: High gamma and leverage make this a speculative play if TWST rebounds from its 52-week low.

Aggressive short-sellers may consider TWST20250815P30 for a deep bearish bet, while TWST20250815P27.5 offers a high-risk, high-gamma position if volatility spikes.

Backtest Twist Bioscience Stock Performance
The backtest of TWST's performance after a -15% intraday plunge shows favorable results, with win rates increasing significantly across various time frames. The 3-Day win rate is 50.75%, the 10-Day win rate is 51.91%, and the 30-Day win rate is 53.90%. This indicates that TWST tends to recover from such significant dips, with the maximum return during the backtest period being 4.66% over 30 days.

Act Now: TWST’s 52-Week Low Test and Sector Crosscurrents
Twist Bioscience’s 15.1% selloff has brought it perilously close to its 52-week low of $27.12, with technical indicators and sector dynamics pointing to continued pressure. The stock’s bearish MACD, oversold RSI, and weak earnings guidance suggest a high probability of further downside in the near term. Investors should closely monitor the $27.50 support level and the August 15 options expiration, where TWST20250815P30 could serve as a high-leverage play if the selloff persists. Meanwhile, Illumina’s 2.9% rise highlights the biotech sector’s divergent performance, underscoring TWST’s need to differentiate its value proposition. For now, a defensive stance with short-dated puts appears prudent as the stock navigates its earnings-driven slump and broader sector headwinds.