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DNA Stock Price Analysis: Is Ginkgo Holdings Missing Something?

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  • Ginkgo Bioworks has lost over 50% market value since August.
  • Research shows that the biotech market may grow exponentially in future.

Biotech companies are gaining a lot of investor interest especially after the world was struck by covid-19 pandemic. However, Ginkgo Bioworks Holdings Inc. (NYSE: DNA) has constantly been struggling to stay afloat in the market. DNA stock plunged by almost 6% at the market close, currently changing hands at $2.06 at publication time.

Biotech Industry has Delivered Marvels Globally

The company became one of the greatest names in the biotech market considering they generated $4.2 Billion in 2019. They acquired a couple of biotech companies, Circularis and Altar, in October 2022. The company explained that the move will contribute to enhancing cell and gene therapies by leveraging their collaborator’s ability to identify novel promoters. Moreover, they took over Zymergen, another biotechnology firm, at a valuation of $300 Million, their biggest purchase to this date.

The biotech industry was valued at $1 Trillion in 2021. The pandemic gave a little push to the vaccine related sales following the success of mRNA vaccines. On top of that, companies engaged in development of gene therapies raised $23.1 Billion in the same year. According to the data, companies produced 11 Billion covid shots as a prevention measure in 2021.

The sector has delivered revolutionizing products in the past. Forbes mentioned a handful of biotech products in a December 2021 article. Personalized medicine has allowed the healthcare industry to produce custom meds developed using a person’s genetics. This allows medical practitioners to make better decisions associated with the treatment. Data suggests that a human genome that cost $3 Billion in 2003, now costs merely $600 today.

Plastic, among the several waste products, is one of the biggest issues people are facing across the globe. It can take around 20 years to 500 years to decompose. Companies in the Biotech industry are developing biological organisms capable of breaking down polyethylene plastic. 

Not just this, the space is developing high yielding crops that can help in the food crisis. According to Bloomberg, a worst case scenario would be 2 Billion people going under this umbrella. Moreover, scientists are working on pest and disease resistance in crops to deliver better quality products to consumers.

Lab grown meat remains another accomplishment for the sector as it has helped reduce animal cruelty considering increasing demands in meat globally. According to research, the market grew at a Compound Annual Growth Rate (CAGR) of around 12% between 2017 to 2021 and is expected to expand at the CAGR of 24% during 2025-2035. This will ultimately deliver a positive impact to biotech companies in future.

DNA Stock Price Analysis

The relative strength index (RSI) is returning to the neutral zone, though the stock’s oversold position hasn’t changed yet. Awesome oscillator shows a buyers’ dominance since December 2022 which is likely to end shortly. The price was moving close to the anchored VWAP but fell short following yesterday’s close.

Fib retracement highlights the shares have tested 0.382 levels a couple of times during October and November before going bearish. DNA stock has lost almost 60% value since August 2022, currently holding a support close to $1.45 and a resistance at $2.25. Regression channel adds fuel to the scenario, increasing the possibility of bearish momentum.

The metaverse market has also attracted healthcare professionals recently. The technology enables remote services, allowing the practitioners to connect irrespective of their locations.

Disclaimer

Contents given in the article must not be consumed as investment advice.

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