TERN Should I Buy
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Terns Pharmaceuticals Inc (TERN) is not a strong buy at the moment for a beginner, long-term investor with $50,000-$100,000 available for investment. The lack of significant positive catalysts, neutral trading sentiment, and limited financial growth trends suggest holding off on this stock for now.
The stock shows mixed signals. While the moving averages are bullish (SMA_5 > SMA_20 > SMA_200), the MACD is below 0 and negatively contracting, and RSI is neutral at 71.991. Key support and resistance levels suggest limited price movement in the short term.
The company is being acquired by Merck, which could provide stability and potential upside if the deal closes successfully. Additionally, the TERN-701 drug pipeline has a promising outlook with a significant market opportunity.
The analyst downgrade to Market Perform and the belief that no higher bidder will emerge for the Merck acquisition reduces the likelihood of immediate upside. Furthermore, the financial performance shows no revenue growth, and net income remains negative.
In 2025/Q4, the company reported no revenue growth (0% YoY), and net income improved slightly but remains negative at -$23.57M. EPS also showed no growth, remaining at -0.24.
Analysts have mixed views. William Blair downgraded the stock to Market Perform due to the Merck acquisition, while Leerink initiated coverage with an Outperform rating and a $58 price target based on the promising TERN-701 drug pipeline. However, the Merck acquisition limits the likelihood of significant near-term upside.
