Merus (MRUS) Moves 7.1% Higher: Will This Strength Last?

Merus N.V. (MRUS) shares soared 7.1% in the last trading session to close at $44.93. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.2% loss over the past four weeks.

Last month, the company entered into a collaboration and license agreement with Gilead Sciences to discover novel dual tumor-associated antigens (TAA) targeting trispecific antibodies and develop multiple separate preclinical research programs. This might have driven the share price rally.

This company is expected to post quarterly loss of $0.83 per share in its upcoming report, which represents a year-over-year change of +3.5%. Revenues are expected to be $8.94 million, down 33.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Merus, the consensus EPS estimate for the quarter has been revised 8.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on MRUS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Merus belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Exelixis (EXEL), closed the last trading session 0.8% lower at $23.53. Over the past month, EXEL has returned -0.6%.

For Exelixis , the consensus EPS estimate for the upcoming report has changed +1.7% over the past month to $0.29. This represents a change of +81.3% from what the company reported a year ago. Exelixis currently has a Zacks Rank of #2 (Buy).

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