Strength Seen in Merus N.V. (MRUS): Can Its 37.5% Jump Turn into More Strength?

Merus N.V. (MRUS) shares soared 37.5% in the last trading session to close at $27.49. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 25.2% loss over the past four weeks.

The stock rallied driven by optimism over the encouraging early clinical data on MCLA-158 and preclinical data on zenocutuzumab which was presented at the AACR-NCI-EORTC virtual international conference on molecular targets and cancer therapeutics. The data showed that treatment with MCLA-158 led to tumor shrinkage in patients with advanced head and neck squamous cell carcinoma while treatment with zenocutuzumab blocked cell growth 100 fold more potently than the anti-HER3 antibody alone.

This company is expected to post quarterly loss of $0.66 per share in its upcoming report, which represents a year-over-year change of +16.5%. Revenues are expected to be $10.53 million, up 22.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Merus N.V., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. 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 >>>>

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