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One thing we could say about the analysts on Merus N.V. (NASDAQ:MRUS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the downgrade, the most recent consensus for Merus from its 17 analysts is for revenues of US$42m in 2025 which, if met, would be a meaningful 17% increase on its sales over the past 12 months. Losses are supposed to balloon 29% to US$4.05 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$49m and losses of US$3.96 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
Check out our latest analysis for Merus
There was no major change to the consensus price target of US$86.19, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Merus' past performance and to peers in the same industry. The analysts are definitely expecting Merus' growth to accelerate, with the forecast 17% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Merus is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Merus after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Merus going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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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.