Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Ginkgo Bioworks Are Rising Today

By Scott Levine – Sep 21, 2021 at 12:22PM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new analyst rating has investors excited.

What happened

Days after trading under its new ticker after completing its SPAC merger with Soaring Eagle Acquisition, Ginkgo Bioworks (NYSE:DNA) is rising higher today, having climbed 5.8% at 11:12 a.m. EDT.

While some investors, recognizing a cheaper price tag, may have hit the buy button following the stock's 7.8% decline yesterday, others may have been more moved to act after a Wall Street analyst offered a bullish take on the stock.

A man sits with his feet on a desk while looking at several computer screens.

Image source: Getty Images.

So what

Initiating coverage on Ginkgo Bioworks, Sriharsha Pappu, an HSBC analyst, assigned a buy rating on the stock and a $14 price target. According to TheFly.com, Pappu believes that the company is developing a "de facto platform for bioengineered products."

Investors are also likely enthusiastic about the analyst's outlook considering the manufacturing challenges that Zymergen, another synbio company, has recently encountered. Between that and the company's changes in management, those interested in gaining exposure to synbio stocks may be recognizing Ginkgo Bioworks as the better option.

Now what

Although its time as a publicly traded company has been extremely short, there is considerable interest in Ginkgo Bioworks. The company projects growing revenue and adjusted EBITDA from $77 million and negative $121 million, respectively, in 2020 to $1.1 billion and $166 million, respectively, in 2025. Besides Main Street investors, Cathie Wood is also interested; the stock is one of the holdings in the ARK Innovation ETF. And when Cathie Wood offers her vote of approval, investors take notice.

Although there is a lot of buzz surrounding the stock, potential investors must recognize that there is still considerable risk associated with an investment. Companies at the cutting edge of innovation may revolutionize industries, but they may also fail to deliver on their promises.

HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Scott Levine owns shares of Ginkgo Bioworks. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.

Stocks Mentioned

HSBC Holdings plc Stock Quote
HSBC Holdings plc
HSBC
$30.58 (0.10%) $0.03
Ark ETF Trust - Ark Innovation ETF Stock Quote
Ark ETF Trust - Ark Innovation ETF
ARKK
$38.16 (0.69%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.