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 consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the latest upgrade, the current consensus, from the ten analysts covering Mersana Therapeutics, is for revenues of US$25m in 2025, which would reflect a disturbing 37% reduction in Mersana Therapeutics' sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.71 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$23m and losses of US$0.71 per share in 2025. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Mersana Therapeutics

The consensus price target fell 13% to US$4.71 asthe analysts signal that ongoing losses are likely to weigh on the stock price.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 37% by the end of 2025. This indicates a significant reduction from annual growth of 42% 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mersana Therapeutics is expected to lag 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. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Mersana Therapeutics' future valuation. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Mersana Therapeutics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. 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..

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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.