MRLN Should I Buy
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MRLN is not a good buy right now for a beginner long-term investor with $50,000-$100,000 to deploy. The stock has bullish long-term analyst support, but the current setup is too weak technically and the latest quarter shows very heavy losses with only minimal revenue. I would not buy it at the current pre-market level of 7.12; the better call is to hold and wait for clearer confirmation of growth and price strength.
The technical picture is weak. MACD histogram is -0.351 and still expanding negatively, which signals downside momentum. RSI_6 at 24.845 shows the stock is oversold, but not yet a strong reversal confirmation. Moving averages are converging, suggesting the stock is trying to stabilize, but price remains below the pivot of 8.629 and just above S1 at 6.981. With pre-market price at 7.12, MRLN is trading near short-term support, but the trend is not confirmed bullish.
Merlin has several constructive catalysts: analysts remain Buy-rated, the company is viewed as a differentiated AI-based autonomy platform in advanced aviation, and it continues to progress in a key defense program ramp. The latest quarter also showed revenue growth of 11.1% year over year, cash and short-term investments increased to $122.8 million, and the company raised $80 million through a PIPE, improving liquidity for execution over the next several quarters.
The biggest negative catalyst is the latest quarter’s sharp deterioration in profitability: GAAP net loss widened to $90.4 million versus $12.7 million a year ago on only $1 million of revenue. The stock also sold off after the financing announcement, and the recent price target was cut sharply to $15 from $25, signaling reduced near-term expectations. The broader market is pre-market lower with the S&P 500 down 0.8%, adding a mild risk-off backdrop.
Latest quarter: Q1 2026. Merlin reported $1 million in revenue, up 11.1% year over year, which shows early-stage growth, but losses widened dramatically to a GAAP net loss of $90.4 million from $12.7 million in Q1 2025. Cash and short-term investments rose to $122.8 million from $59.3 million at year-end 2025, and the $80 million PIPE strengthened the balance sheet, but operating performance remains very weak relative to revenue scale.
Wall Street remains constructive overall, but the tone has turned more cautious. Roth Capital keeps a Buy rating, but cut its price target to $15 from $25 on 2026-05-14, after previously raising it to $25 from $15 on 2026-04-16 and initiating at Buy with a $15 target on 2026-04-14. The pros view is that Merlin is a differentiated AI autonomy play with defense and commercial aviation upside and funding to execute. The cons view is that execution is still early, revenue is minimal, losses are very large, and the recent target cut suggests slower near-term progress than previously expected.
