It is Poised to be a Bull Market for Mersana Therapeutics Inc. (MRSN)

Mersana Therapeutics Inc. (NASDAQ: MRSN) stock fell -0.20% on Friday to $4.95 against a previous-day closing price of $4.96. With 3.18 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.21 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $5.2000 whereas the lowest price it dropped to was $4.9400. The 52-week range on MRSN shows that it touched its highest point at $14.80 and its lowest point at $2.68 during that stretch. It currently has a 1-year price target of $18.00. Beta for the stock currently stands at 1.94.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MRSN was down-trending over the past week, with a drop of -2.94%, but this was up by 0.81% over a month. Three-month performance surged to 25.00% while six-month performance rose 15.65%. The stock lost -53.87% in the past year, while it has lost -20.42% so far this year. A look at the trailing 12-month EPS for MRSN yields -2.49 with Next year EPS estimates of -1.98. For the next quarter, that number is -0.52. This implies an EPS growth rate of -68.30% for this year and 6.40% for next year.

Float and Shares Shorts:

At present, 79.93 million MRSN shares are outstanding with a float of 69.38 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.77 million, which was 4.92% higher than short shares on Jun 14, 2022. In addition to Ms. Anna Protopapas M.B.A. as the firm’s Pres, CEO & Director, Mr. Brian C. DeSchuytner serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 89.57% of MRSN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 40.80% of MRSN, in contrast to 31.18% held by mutual funds. Shares owned by individuals account for 16.27%. As the largest shareholder in MRSN with 7.01% of the stake, Avoro Capital Advisor LLC holds 6,800,000 shares worth 6,800,000. A second-largest stockholder of MRSN, Millennium Management LLC, holds 4,883,749 shares, controlling over 5.04% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in MRSN, holding 4,781,043 shares or 4.93% stake. With a 4.26% stake in MRSN, the BB Biotech AG is the largest stakeholder. A total of 4,135,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.65% of MRSN stock, is the second-largest Mutual Fund holder. It holds 2,573,923 shares valued at 11.89 million. Biotech Growth Trust Plc holds 2.38% of the stake in MRSN, owning 2,312,222 shares worth 10.68 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MRSN since 7 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With MRSN analysts setting a high price target of $26.00 and a low target of $13.00, the average target price over the next 12 months is $18.00. Based on these targets, MRSN could surge 425.25% to reach the target high and rise by 162.63% to reach the target low. Reaching the average price target will result in a growth of 263.64% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. MRSN will report FY 2022 earnings on 03/01/2023. Analysts have provided yearly estimates in a range of -$1.79 being high and -$2.51 being low. For MRSN, this leads to a yearly average estimate of -$2.13. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Mersana Therapeutics Inc. surprised analysts by -$0.28 when it reported -$0.59 EPS against a consensus estimate of -$0.31. The surprise factor in the prior quarter was -$0.02. Based on analyst estimates, the high estimate for the next quarter is -$0.45 and the low estimate is -$0.61. The average estimate for the next quarter is thus -$0.51.

Summary of Insider Activity:

Insiders traded MRSN stock several times over the past three months with 11 Buys and 0 Sells. In these transactions, 926,273 shares were bought while 0 shares were sold. The number of buy transactions has increased to 24 while that of sell transactions has risen to 5 over the past year. The total number of shares bought during that period was 5,117,293 while 18,414 shares were sold.

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