Merus (MRUS) AI Stock Analysis

• Market Cap: $7.15B
• Dividend Yield: N/A
• Average Volume (3M): 3.02M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.04
• Revenue Growth: 59.77%
• EPS Growth: -92.92%
• Country: US
• Employees: 260
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -2.23
• Shares Outstanding: 75,784,440
• 10 Day Avg. Volume: 7,798,884
• 30 Day Avg. Volume: 3,022,812
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.43
• Enterprise Value/Revenue: 54.07
• Enterprise Value/Gross Profit: 54.07
• Enterprise Value/Ebitda: -7.84
• 1Y Price Target: $97.71
• Price Target Upside: 3.31% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 17

• Rating: 62 Neutral
• Price Target: $71.00 ▼(-24.93% Downside)

Merus's overall stock score is driven by strong technical indicators and positive corporate events, which are offset by weak financial performance and valuation metrics. The stock shows bullish momentum and has strengthened its financial position through a public offering, but ongoing losses and negative cash flows remain significant risks.

Positive Factors

Financial Stability

The successful public offering enhances Merus's financial stability, providing funds to support operations and clinical development into 2028.

Promising Clinical Trial Results

Promising phase 2 trial results for Merus's bispecific antibody suggest potential for future product approval and market success, strengthening its competitive position.

Strategic Partnerships

Strategic partnerships provide Merus with financial support and risk-sharing opportunities, enhancing its ability to advance clinical programs and innovate.

Negative Factors

Profitability Challenges

Ongoing profitability challenges, reflected in negative margins, may hinder Merus's ability to achieve sustainable growth and financial independence.

Cash Flow Constraints

Negative cash flow trends indicate potential liquidity constraints, which could limit Merus's operational flexibility and ability to invest in growth opportunities.

Profitability and Cash Flow Risks

Persistent losses and negative cash flows threaten Merus's long-term sustainability, potentially impacting its ability to fund research and development.

Merus Business Overview & Revenue Model

Company Description

Merus N.V., a clinical-stage immuno-oncology company, engages in the discovery and development of bispecific antibody therapeutics in the Netherlands. Its bispecific antibody candidate pipeline includes Zenocutuzumab (MCLA-128), which is in a phase 2 clinical trials for the treatment of patients with metastatic breast cancer, as well as in Phase 1/2 clinical trials for the treatment of solid tumors that harbor Neuregulin 1. The company is also developing MCLA-158, which is in a phase I clinical trial for the treatment of solid tumors; MCLA-145, which is in phase 1 clinical trials for the treatment of solid tumors; MCLA-129, which is in phase 1/2 clinical trials for the treatment of patients with advanced non-small cell lung cancer and other solid tumors; and ONO-4685 that is Phase 1 clinical trial to treat relapsed/refractory T cell lymphoma. In addition, it has collaboration agreement with Betta Pharmaceuticals Co. Ltd for the research and development of stage bispecific antibody candidates include MCLA-129; and collaboration with Incyte Corporation for the development of MCLA-145. The company was incorporated in 2003 and is headquartered in Utrecht, the Netherlands.

How the Company Makes Money

Merus generates revenue primarily through partnerships and collaborations with larger pharmaceutical companies, which may involve upfront payments, milestone payments, and royalties on future sales of products developed from their technology. By entering into strategic alliances, Merus can share the financial risks associated with drug development while receiving funding to support its research initiatives. Additionally, the company may also generate revenue through grants and government funding aimed at supporting innovative cancer therapies. As Merus advances its clinical programs and moves closer to commercialization, it may also expect to generate revenue from product sales once its therapies receive regulatory approval.

Merus Financial Statement Overview

Summary

Merus demonstrates strong cost management with a consistent gross profit margin, but faces significant profitability and cash flow challenges. The low debt levels provide financial stability, yet ongoing losses and negative cash flows pose risks to long-term sustainability.

Income Statement

Merus shows a consistent gross profit margin of 100%, indicating effective cost management relative to revenue. However, the company faces challenges with negative net profit margins and EBIT margins, reflecting ongoing losses. Revenue growth is positive in the TTM period, but historical volatility suggests instability.

Balance Sheet

The company maintains a low debt-to-equity ratio, indicating prudent leverage management. However, the negative return on equity highlights ongoing profitability challenges. The equity ratio is solid, suggesting a stable capital structure.

Cash Flow

Merus has a high free cash flow to net income ratio, indicating efficient cash flow management relative to net losses. However, negative operating cash flow and free cash flow growth rates suggest liquidity challenges and potential cash constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	56.23M	36.13M	43.95M	41.59M	49.11M	29.94M
Gross Profit	56.23M	36.13M	43.95M	29.60M	-37.16M	-27.39M
EBITDA	-387.89M	-269.60M	-154.01M	-148.26M	-77.75M	-60.93M
Net Income	-385.52M	-215.33M	-154.94M	-131.19M	-66.82M	-85.51M
Balance Sheet
Total Assets	980.18M	785.13M	455.49M	376.54M	456.60M	231.22M
Cash, Cash Equivalents and Short-Term Investments	710.22M	537.03M	355.18M	290.23M	410.43M	207.75M
Total Debt	11.00M	9.91M	12.16M	13.47M	3.75M	3.95M
Total Liabilities	138.44M	134.77M	99.15M	129.49M	140.40M	128.95M
Stockholders Equity	841.74M	647.93M	356.34M	247.06M	316.20M	102.26M
Cash Flow
Free Cash Flow	-313.32M	-187.50M	-146.19M	-157.54M	-60.50M	-81.19M
Operating Cash Flow	-313.08M	-185.84M	-142.21M	-149.90M	-59.63M	-79.90M
Investing Cash Flow	-227.59M	-220.22M	-27.02M	2.80M	-146.62M	-1.49M
Financing Cash Flow	358.98M	494.01M	230.09M	58.74M	281.95M	39.52M

Merus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRUS, the sentiment is Positive. The current price of 94.58 is above the 20-day moving average (MA) of 80.03, above the 50-day MA of 71.77, and above the 200-day MA of 53.28, indicating a bullish trend. The MACD of 7.68 indicates Negative momentum. The RSI at 86.37 is Negative, neither overbought nor oversold. The STOCH value of 98.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MRUS.

Merus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRYS	78 Outperform	$5.42B	38.40	15.61%	―	116.09%	35.29%
MRUS	62 Neutral	$7.15B	―	-48.54%	―	59.77%	-92.92%
AKRO	60 Neutral	$3.72B	―	-31.14%	―	―	-11.39%
PTCT	58 Neutral	$5.12B	9.47	33.08%	―	96.00%	―
ZLAB	53 Neutral	$3.77B	―	-28.39%	―	32.38%	33.47%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
RNA	48 Neutral	$6.85B	―	-37.76%	―	1.23%	-20.45%

Merus Corporate Events

Merus Announces Public Offering of Common Shares

On June 3, 2025, Merus N.V. entered into an underwriting agreement with several underwriters for a public offering of 5,263,158 common shares at $57.00 per share, expected to close around June 5, 2025. The company anticipates net proceeds of approximately $281.7 million, which will be used to fund operations into 2028, advance clinical development, and support corporate purposes, enhancing its financial stability and market position.