Analyst Downgrade Weighs on Spero Therapeutics Shares

Shares of Spero Therapeutics are facing pressure following a rating downgrade from the analysis firm Wall Street Zen. The move comes despite the biopharmaceutical company posting a surprise profit in its most recent quarter, as a significant revenue shortfall has prompted a more cautious market assessment.

The immediate catalyst for the revised rating was the company's mixed financial results for the third quarter of 2025. While Spero Therapeutics surpassed earnings expectations, reporting a loss per share (EPS) of -$0.13 against an anticipated -$0.25, it fell dramatically short on the top line.

The firm generated revenue of just $5.44 million, missing analyst forecasts of $12 million by a wide margin. This substantial revenue gap appears to be the primary driver behind Wall Street Zen's decision to adjust its rating from "Buy" to "Hold." The full-year 2025 EPS consensus now stands at -$1.20.

Market Context and Financial Health

The stock is currently trading around $2.26, notably below its 52-week high of $3.22. The downgrade reflects a recalibration of the company's financial outlook by analysts.

Should investors sell immediately? Or is it worth buying Spero Therapeutics?

Despite the shift to a "Hold" recommendation, the consensus price target among covering analysts remains at $5.00. This implies a theoretical upside potential of over 120% from current levels. According to MarketBeat data, the current analyst consensus comprises 1 buy rating, 2 hold ratings, and 1 sell recommendation. Spero Therapeutics holds a market capitalization of approximately $127 million.

The stock has recently been trading in a narrow range between $2.25 and $2.31. A negative net margin exceeding -100% in the last quarter underscores the substantial capital requirements of its ongoing business operations.

Insider Trading Activity Adds to the Narrative

Adding another layer to the current market sentiment, an insider transaction has drawn attention. On November 7, insider Esther Rajavelu sold 40,270 shares at an average price of $2.37, reducing her stake by approximately 4.43%. Such sales are often scrutinized by market participants, particularly when they coincide with mixed quarterly results.

The company's next significant valuation milestone will likely depend on its ability to clarify its revenue pathways and realize anticipated milestone payments. For now, the market is adopting a wait-and-see approach following the analyst's cooler assessment.