When shares of innovative growth stocks like Ginkgo Bioworks (DNA -10.03%) plummet, cunning investors know that there could be opportunity in the air. So even if a company like Ginkgo is down by more than 76% in 2022, it's a good time to take a closer look.

In fact, there are a few reasons to believe that now is a great time to start a position in the stock for the purpose of a long-term hold. Here's why Ginkgo's big ambitions are already being realized, and why shareholders are likely to benefit in the years to come.

The opportunity could be sizable in the long term

The biggest reason that Ginkgo is an attractive buy is that it benefits enormously from economies of scale in its manufacturing. While it isn't currently profitable, that probably won't be true forever, and here's why.

Ginkgo's business model features two main pieces: the biosecurity segment, and the biofoundry segment. Its biosecurity operations involve providing public health testing for threats like the coronavirus, and the company is also working with the U.S intelligence community to detect bioengineered DNA for national security purposes.

Biosecurity brought in $289 million in the first three quarters of 2022, which makes it loom large against 2021's full-year revenue of $313.8 million, and it'll likely continue to be a major portion of the top line. Scaling up biosecurity capabilities drives the cost of processing each sample, so it's favorable to keep growing.

But the biofoundry segment that's responsible for $90 million in sales so far this year is where Ginkgo's true potential rests. The company's collaboration with Cronos Group is a good example of what a biofoundry does.

Cronos is a marijuana business that makes products like vaporizers and edibles, using chemicals called cannabinoids that are extracted from cannabis plants that it cultivates in greenhouses. Rather than Cronos continuing to grow its cannabis crops from scratch, Ginkgo offers a different approach wherein the genes responsible for cannabinoid synthesis are spliced into yeast cells or bacterial cells. Then, those organisms are cultured in the biotech's high-throughput bioreactors, in which they produce vast quantities of cannabinoids that are subsequently passed on to Cronos for further manufacturing and sale. 

So the biofoundry concept is to create a biological manufacturing operation based on a customer's need for a specific chemical, molecule, or protein. Ginkgo's biofoundry relies heavily on automation at every step of the process to ensure that costs are as low as possible.

That means using high-throughput screening and genetic engineering technologies, as well as extensive use of robotics, machine learning, and mass-scale fermentation methods. It also means there's likely huge economies of scale waiting to be taken advantage of. And in the third quarter alone, Ginkgo started 15 new biofoundry programs, bringing its active total to 85 programs across 43 customers.

Execution risks might rain on the parade 

The long-term thesis for Ginkgo is that scaling up its biofoundry will drive down its costs while expanding its top line, hopefully in a self-reinforcing cycle as the company garners more demand by offering lower prices to customers.

The biotech is still in the early innings, however, and it has a long way to go before proving its business model is viable. As the risks are highest now, so are the potential returns, and as time passes, the biotech will be consistently de-risking by demonstrating improvements to its margins if it's going to succeed.

The biggest risk is that the business runs out of money before it can reach a large-enough scale to become profitable. At the end of the third quarter, it had $1.3 billion in the bank, and its trailing-12-month cash burn totals $344.7 billion. It won't have any problem continuing to grow and refine its manufacturing operations for at least three years at that rate, and it has plenty of money to acquire promising start-ups.

Between now and whenever it reaches profitability, Ginkgo's shares could fall a lot, especially considering it's a growth stock in a bear market that's shown a remarkable dislike of businesses at a similar stage of life in the technology sector.

If you're looking for massive growth potential and you're willing to hold it for a long time, now is the time to consider this stock. On the other hand, if you're a more conservative investor, it probably makes more sense to wait until the biotech is generating cash before taking the plunge.