Earnings Beat: Merus N.V. (NASDAQ:MRUS) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Last week, you might have seen that Merus N.V. (NASDAQ:MRUS) released its quarterly result to the market. The early response was not positive, with shares down 7.9% to US$44.52 in the past week. 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. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Merus

Taking into account the latest results, the current consensus from Merus' twelve analysts is for revenues of US$51.0m in 2024. This would reflect a substantial 33% increase on its revenue over the past 12 months. Losses are expected to increase substantially, hitting US$2.87 per share. Before this latest report, the consensus had been expecting revenues of US$38.3m and US$3.23 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Merus analyst has a price target of US$69.00 per share, while the most pessimistic values it at US$52.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Merus' growth to accelerate, with the forecast 46% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Merus is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Merus going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Merus 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.