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Merus N.V. (NASDAQ:MRUS) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates

Merus N.V. (NASDAQ:MRUS) shareholders are probably feeling a little disappointed, since its shares fell 7.9% to US$44.52 in the week after its latest quarterly results. Revenues of US$7.9m came in a modest 9.2% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.59 coming in a substantial 23% smaller than what the analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Merus

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Taking into account the latest results, the most recent consensus for Merus from 13 analysts is for revenues of US$41.0m in 2024. If met, it would imply a credible 7.1% increase on its revenue over the past 12 months. Per-share losses are expected to explode, reaching US$3.16 per share. Before this latest report, the consensus had been expecting revenues of US$38.3m and US$3.23 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.

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There was no major change to the consensus price target of US$60.55, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Merus, with the most bullish analyst valuing it at US$69.00 and the most bearish at US$52.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's clear from the latest estimates that Merus' rate of growth is expected to accelerate meaningfully, with the forecast 9.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 19% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Merus is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Merus. Long-term earnings power is much more important than next year's profits. We have forecasts for Merus going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Merus has 2 warning signs we think you should be aware of.

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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.