NEW YORK – Investment bank BTIG on Wednesday downgraded shares of Ginkgo Bioworks to a Sell rating with a price target of $.50.
In a note to investors, analyst Mark Massaro cited consecutive "tough" quarters, impending layoffs, and lowered guidance. "But the bigger concern for us is that Ginkgo no longer has conviction that its key 'cell program add' metric is highly correlated to revenue growth, and it's difficult to model how new cell program adds will flow into revenue growth in 2024, 2025, and beyond," he wrote.
Last week, Boston-based Ginkgo reported first quarter revenues of $38 million, down 53 percent from $81 million a year ago, driven by the expected ramp-down of school-based COVID-19 testing. Among other changes, Ginkgo plans to reduce its annual operating expenses by $200 million by mid-2025 and will lay off at least 25 percent of its staff, as well as reduce its real estate footprint. In addition, the firm is changing its dealmaking strategy.
In Wednesday morning trading on the New York Stock Exchange, shares of Ginkgo were down 1 percent at $.83.