Not a good buy right now: the stock is in a strong bearish trend after a major Phase 3 primary-endpoint failure, and near-term headlines are dominated by litigation.
Oversold conditions (RSI ~19) can produce a short-lived bounce, but without a proprietary buy signal and with heavy event risk (earnings 2026-02-16), odds favor more volatility than sustained upside.
If you’re impatient and want immediate upside, MREO does not currently offer a high-probability setup; the risk/reward is skewed negative until there’s clear regulatory/strategic progress (surrogate endpoint acceptance, partnership, or financing clarity).
Momentum: RSI_6 at 18.946 signals deeply oversold; this can support a reflex bounce, but it does not confirm a reversal.
MACD: Histogram at 0.0369 above zero but positively contracting—suggests upside momentum is fading rather than accelerating.
Key levels: Price ~0.4032 is sitting on S1 (0.403). A clean break risks a move toward S2 (0.365). Upside resistance is dense at Pivot 0.463, then R1 0.524.
Takeaway: This is a “bear-market oversold” chart—more consistent with a dead-cat bounce than a durable uptrend.
Options Data
Bullish
Open Interest Put-Call Ratio
Bearish
Option Volume Put-Call Ratio
Positioning vs flow mismatch: Open interest P/C 0.42 implies more calls outstanding (legacy positioning/speculation), while volume P/C 4.84 shows today’s flow heavily put-driven (near-term bearish/hedging demand).
Volatility: Implied vol (30D) ~378.94 vs historical vol ~631.32; IV percentile ~78 (options pricing in extreme moves).
Activity spike: Today’s volume vs 30D average ~20.65x suggests event-driven trading/hedging rather than confident dip-buying.
Sentiment read: Near-term options market is behaving defensively (puts dominating flow) despite call-heavy open interest—bearish bias with high uncertainty.
Technical Summary
Sell
8
Buy
3
Positive Catalysts
raises odds of a short-term rebound.
Neutral/Negative Catalysts
can pressure sentiment and distract management.
Financial Performance
Latest quarter provided: 2025/Q3.
Revenue: reported as 0 (no meaningful operating revenue base).
Profitability: Net income fell to -$7.024M (down -53.18% YoY), indicating losses worsened meaningfully.
EPS: -0.01 (down -50.00% YoY), consistent with deteriorating earnings power.
Gross margin: 73.4% (not very informative given minimal/zero revenue).
Growth takeaway: Financials show a cash-consuming biotech profile with worsening losses—unfavorable setup after a Phase 3 miss (often increases dilution/partnering pressure).
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
Ratings/targets sharply reset lower on 2025-12-29 after Phase 3 failure:
Cantor Fitzgerald: Overweight maintained, PT cut to $3 from $6.
LifeSci Capital: Downgraded to Market Perform from Outperform.
BTIG: Buy maintained, PT cut to $1 from $6; probability of success cut to ~30% (from 90%); alvelestat conservatively removed from valuation.
Baird: Outperform maintained, PT cut to $1 from $8; probability of success cut to ~5%.
Jefferies: Downgraded to Hold from Buy; PT cut to $0.50 from $7; highlighted high pipeline dependency and need for alvelestat partnership.
Wall Street pros view (bull case): BMD signal could support an alternative regulatory path; extreme selloff may already reflect a lot of bad news.
Wall Street cons view (bear case): primary endpoints failed, probability of success slashed, pipeline concentration risk high, and strategy/financing uncertainty elevated—overall a net-negative professional setup.
Wall Street analysts forecast MREO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MREO is 2.08 USD with a low forecast of 0.5 USD and a high forecast of 5 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
Wall Street analysts forecast MREO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MREO is 2.08 USD with a low forecast of 0.5 USD and a high forecast of 5 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 0.375
Low
0.5
Averages
2.08
High
5
Current: 0.375
Low
0.5
Averages
2.08
High
5
Cantor Fitzgerald
Kristen Kluska
Overweight
downgrade
$6 -> $3
AI Analysis
2025-12-29
Reason
Cantor Fitzgerald
Kristen Kluska
Price Target
$6 -> $3
AI Analysis
2025-12-29
downgrade
Overweight
Reason
Cantor Fitzgerald analyst Kristen Kluska lowered the firm's price target on Mereo BioPharma to $3 from $6 and keeps an Overweight rating on the shares after the company announced that neither of the Phase 3 Orbit and Cosmic studies for setrusumab in Osteogenesis Imperfecta achieved statistical significance against their primary endpoints.
LifeSci Capital
Outperform -> Market Perform
downgrade
2025-12-29
Reason
LifeSci Capital
Price Target
2025-12-29
downgrade
Outperform -> Market Perform
Reason
LifeSci Capital downgraded Mereo BioPharma to Market Perform from Outperform.
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