The analysts covering Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Ginkgo Bioworks Holdings' three analysts is for revenues of US$123m in 2026, which would reflect a definite 19% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$159m in 2026. It looks like forecasts have become a fair bit less optimistic on Ginkgo Bioworks Holdings, given the sizeable cut to revenue estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 10% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 24% decline in revenue until the end of 2026. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.7% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Ginkgo Bioworks Holdings to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Ginkgo Bioworks Holdings after today.

Of course, this isn't the full story. We have estimates for Ginkgo Bioworks Holdings from its three analysts out until 2027, and you can see them free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.