Merus (MRUS) AI Stock Analysis

• Market Cap: $7.34B
• Dividend Yield: N/A
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.76
• Revenue Growth: 57.54%
• EPS Growth: -36.57%
• Country: US
• Employees: 260
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -1.26
• Shares Outstanding: 75,847,176
• 10 Day Avg. Volume: 1,217,312
• 30 Day Avg. Volume: 1,269,367
• PEG Ratio: -1.11
• Price to Book (P/B): 4.17
• Price to Sales (P/S): 77.42
• P/FCF Ratio: -14.40
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 127.04
• Enterprise Value/Gross Profit: -58.41
• Enterprise Value/Ebitda: -20.09
• 1Y Price Target: $97.71
• Price Target Upside: 1.12% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16
• EPS Forecast (FY): -5.67
• Revenue Forecast (FY): $52.39M

• Rating: 52 Neutral
• Price Target: $96.00 ▼(-0.65% Downside)

Merus's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenue and substantial losses. While technical analysis indicates strong upward momentum, the overbought signals suggest caution. The negative P/E ratio further reflects the company's financial struggles, limiting its valuation appeal.

Positive Factors

Innovative Product Pipeline

The development of bispecific antibodies like petosemtamab indicates a strong innovative pipeline, enhancing long-term growth potential in cancer therapeutics.

Strategic Partnerships

Strategic alliances with larger pharmaceutical companies provide financial support and risk-sharing, bolstering Merus's ability to advance its drug development programs.

Revenue Growth

Strong revenue growth indicates successful execution of strategic initiatives and potential for increased market share in the biotechnology sector.

Negative Factors

Financial Performance

Ongoing financial struggles, including declining revenue and losses, threaten long-term sustainability and require strategic adjustments to improve profitability.

Cash Flow Challenges

Persistent cash flow difficulties limit Merus's ability to fund operations and invest in growth opportunities, potentially hindering long-term expansion.

Profitability Issues

Negative profitability metrics reflect operational inefficiencies, posing a challenge to achieving sustainable growth and financial health.

Merus Business Overview & Revenue Model

Company Description

Merus (MRUS) is a biotechnology company focused on the development of innovative therapies for cancer treatment. It specializes in creating and advancing bispecific antibody therapeutics that can simultaneously engage multiple targets on cancer cells, enhancing the immune system's ability to fight tumors. The company operates primarily in the biopharmaceutical sector, with a strong emphasis on oncology, and aims to address unmet medical needs through its proprietary technology platform and pipeline of product candidates.

How the Company Makes Money

Merus generates revenue primarily through several key streams, including collaboration agreements with pharmaceutical companies, milestone payments from partnerships, and potential royalties on future product sales. The company often enters into strategic partnerships to co-develop its therapies, which can provide significant upfront payments and funding for clinical trials. Additionally, upon achieving specific developmental or regulatory milestones, Merus may receive milestone payments from its partners. These partnerships not only contribute to immediate revenue but also enhance the company's research capabilities and market access. As Merus progresses its product candidates through clinical trials and toward commercialization, it stands to benefit from potential future product sales, which could further diversify its revenue streams.

Merus Financial Statement Overview

Summary

Merus faces significant financial challenges across all verticals. The income statement reflects declining revenue and substantial losses, while the balance sheet shows low leverage but negative profitability metrics. Cash flow analysis indicates ongoing cash flow difficulties, despite slight improvements in free cash flow growth. Overall, the company needs to address its profitability and cash flow issues to improve its financial health.

Income Statement

Merus has experienced declining revenue growth, with a negative growth rate in the TTM period. The company also faces significant challenges with profitability, as indicated by negative gross and net profit margins. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Overall, the income statement shows a struggling financial performance with limited revenue growth and substantial losses.

Balance Sheet

The balance sheet shows a relatively low debt-to-equity ratio, indicating conservative leverage. However, the return on equity is negative, highlighting the company's inability to generate profits from its equity base. The equity ratio is not explicitly calculated, but the company's high stockholders' equity relative to total assets suggests a solid equity base. Despite the low leverage, the negative ROE indicates financial underperformance.

Cash Flow

Merus's cash flow statement reveals negative operating and free cash flows, with a slight improvement in free cash flow growth in the TTM period. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is slightly above 1, suggesting that free cash flow is marginally better than net income, but overall cash flow performance remains weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	51.17M	34.88M	39.81M	38.84M	43.15M	24.51M
Gross Profit	-111.30M	12.96M	29.31M	28.88M	-43.12M	-32.82M
EBITDA	-323.66M	-260.24M	-139.50M	-148.26M	-77.75M	-60.93M
Net Income	-334.90M	-207.85M	-140.34M	-122.52M	-58.70M	-70.00M
Balance Sheet
Total Assets	771.99M	785.13M	455.49M	376.54M	456.60M	231.22M
Cash, Cash Equivalents and Short-Term Investments	542.95M	537.03M	355.18M	290.23M	410.43M	207.75M
Total Debt	10.52M	9.91M	12.16M	13.47M	3.75M	3.95M
Total Liabilities	110.36M	134.77M	99.15M	129.49M	140.40M	128.95M
Stockholders Equity	661.63M	647.93M	356.34M	247.06M	316.20M	102.26M
Cash Flow
Free Cash Flow	-317.87M	-187.50M	-146.19M	-157.54M	-60.50M	-81.19M
Operating Cash Flow	-317.27M	-185.84M	-142.21M	-149.90M	-59.63M	-79.90M
Investing Cash Flow	-93.55M	-220.22M	-27.02M	2.80M	-146.62M	-1.49M
Financing Cash Flow	354.22M	494.01M	230.09M	58.74M	281.95M	39.52M

Merus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 96.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 96.63 is above the 20-day moving average (MA) of 96.11, above the 50-day MA of 95.33, and above the 200-day MA of 65.06, indicating a bullish trend. The MACD of 0.79 indicates Positive momentum. The RSI at 73.91 is Negative, neither overbought nor oversold. The STOCH value of 87.94 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	80 Outperform	$6.80B	35.96	19.66%	―	54.51%	275.94%
PTCT	72 Outperform	$5.95B	8.82	―	―	97.54%	―
RNA	60 Neutral	$10.74B	―	-32.44%	―	106.27%	-43.90%
AKRO	60 Neutral	$4.50B	―	-34.53%	―	―	-0.06%
MRUS	52 Neutral	$7.34B	―	-51.57%	―	57.54%	-36.57%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ZLAB	48 Neutral	$2.05B	―	-28.96%	―	23.73%	30.16%

Merus Corporate Events

Merus Enters Transaction Agreement with Genmab

On September 29, 2025, Merus N.V. entered into a Transaction Agreement with Genmab A/S and its subsidiary, Genmab Holding II B.V., for a tender offer to purchase all outstanding shares of Merus at $97.00 per share. This agreement, which includes subsequent offering periods and back-end transactions, aims to make Merus an indirect wholly owned subsidiary of Genmab. The transaction will lead to the delisting of Merus’s shares from Nasdaq and cessation of its reporting obligations. The agreement is subject to various conditions, including shareholder approval and regulatory clearances, and outlines specific termination rights and fees.