Twist Bioscience Plunges 17.4%—Is This a Buying Opportunity or a Warning Signal?

Summary
• Twist Bioscience (TWST) trades at $27.82, down 17.4% intraday
• Intraday range of $27.54–$30.44 highlights sharp volatility
• Q3 earnings report revealed $0.33 GAAP EPS vs. $0.53 estimate
• 52-week low of $27.12 nearly breached as synthetic biology growth slows

Twist Bioscience’s stock is in freefall as investors grapple with mixed signals from its Q3 earnings report. While the company swung to GAAP profitability, underlying business dynamics—including a deceleration in synthetic biology—have triggered a sharp selloff. The stock’s 17.4% drop has pushed it near its 52-week low, raising urgent questions about whether this is a short-term correction or a deeper re-rating.

Q3 Earnings Surprise Overshadowed by Synthetic Biology Headwinds
Despite a $0.33 GAAP EPS beat driven by a one-time gain from the Atlas Data Storage spin-off, the market focused on the 7% year-over-year growth in synthetic biology—far below the 21% growth in Q2. This slowdown, coupled with higher selling expenses and concerns about academic research funding, triggered a reassessment. The $48.8M non-recurring gain inflated GAAP results, but recurring fundamentals—including a $237M gene shipment volume and 2,484 active customers—failed to allay fears of margin compression in core segments.

Diagnostics & Research Sector Mixed as Illumina Gains
The Diagnostics & Research sector showed divergence, with Illumina (ILMN) rising 1.45% as its sequencing tools gained traction. However, TWST’s selloff wasn’t sector-driven but stemmed from its own earnings guidance. While NGS tools grew 27% to $55.3M, synthetic biology’s weaker performance and the absence of dividend payouts left TWST exposed to profit-taking and profit-taking.

Bullish Options Play Amid Oversold Conditions
• MACD: -0.3135 (bearish), Signal Line: 0.0899 (neutral), Histogram: -0.4035 (bearish)
• RSI: 30.34 (oversold), Bollinger Bands: $27.54–$33.04 (near lower band)
• 200-day MA: $40.93 (well above current price), 30-day MA: $36.20 (resistance)

Technical indicators suggest TWST is oversold (RSI: 30.34) and trading near its 52-week low. A short-term bounce could target $29.50, but the 200-day MA at $40.93 remains a distant hurdle. For aggressive traders, two options stand out:

• TWST20250815C27.5
- Call Option, Strike: $27.5, Expiry: 2025-08-15
- IV Ratio: 94.26% (elevated), Leverage Ratio: 13.56% (moderate), Delta: 0.5616 (high), Theta: -0.1258 (rapid time decay), Gamma: 0.0829 (price-sensitive), Turnover: $460 (liquid)
- High IV suggests volatility expectations, while delta/gamma favor rapid price response. A 5% downside to $26.43 would yield $0.82 payoff (max(ST - K, 0) = $26.43 - $27.5 = $0).

• TWST20250815C30
- Call Option, Strike: $30, Expiry: 2025-08-15
- IV Ratio: 95.92% (very high), Leverage Ratio: 25.26% (aggressive), Delta: 0.3650 (moderate), Theta: -0.1076 (accelerated decay), Gamma: 0.0778 (responsive), Turnover: $2,750 (highly liquid)
- High leverage and IV make this ideal for a rebound. A 5% downside to $26.43 would yield $3.57 payoff (max(ST - K, 0) = $0).

Action: If TWST rebounds above $29.50, TWST20250815C27.5 offers short-term upside. For a bearish hedge, TWST20250815C30 provides aggressive exposure.

Backtest Twist Bioscience Stock Performance
The backtest of TWST's performance after a -17% 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 52.08%, and the 30-Day win rate is 53.91%. This indicates that TWST tends to recover and even surpass its previous levels in the short term following a substantial intraday decline. The maximum return during the backtest period was 4.71%, which occurred on day 59, further suggesting that TWST can deliver positive returns in the aftermath of a significant downturn.

Short-Term Volatility Expected—Watch the 52-Week Floor
The 17.4% selloff has pushed TWST to $27.82, just $0.68 above its 52-week low. While the stock’s oversold RSI and Bollinger Band proximity suggest potential for a near-term rebound, synthetic biology’s slower growth and elevated IV in options indicate lingering risk. Investors should monitor whether TWST can hold above $27.50 (lower band) and watch Illumina (ILMN, +1.45%) as a sector barometer. Act now: Buy TWST20250815C27.5 for a rebound trade or short TWST20250815C30 if the 52-week low breaks.