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Mersana Therapeutics, Inc. (NASDAQ:MRSN) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Earnings missed the mark badly, with revenues of US$2.3m falling 74% short of expectations. Losses correspondingly increased, with a US$0.20 per-share statutory loss some 18% larger than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mersana Therapeutics after the latest results.
Check out our latest analysis for Mersana Therapeutics
After the latest results, the consensus from Mersana Therapeutics' ten analysts is for revenues of US$25.0m in 2024, which would reflect a not inconsiderable 16% decline in revenue compared to the last year of performance. Losses are expected to be contained, narrowing 17% from last year to US$0.71. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$38.1m and losses of US$0.62 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target was broadly unchanged at US$6.44, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Mersana Therapeutics at US$9.00 per share, while the most bearish prices it at US$3.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 30% annualised decline to the end of 2024. That is a notable change from historical growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mersana Therapeutics is expected to lag the wider industry.