Rainbows and Unicorns: Mersana Therapeutics, Inc. (NASDAQ:MRSN) Analysts Just Became A Lot More Optimistic

Mersana Therapeutics, Inc. (NASDAQ:MRSN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Mersana Therapeutics too, with the stock up 12% to US$7.42 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

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Following the latest upgrade, the nine analysts covering Mersana Therapeutics provided consensus estimates of US$25m revenue in 2025, which would reflect a sizeable 27% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 54% to US$6.82 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$22m and losses of US$14.96 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Mersana Therapeutics

The consensus price target fell 77%, to US$28.29, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 47% by the end of 2025. This indicates a significant reduction from annual growth of 50% 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 20% annually for the foreseeable future. It's pretty clear that Mersana Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Mersana Therapeutics' prospects. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Mersana Therapeutics could be one for the watch list.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Mersana Therapeutics going out to 2027, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.