Analysts Have Just Cut Their Pliant Therapeutics, Inc. (NASDAQ:PLRX) Revenue Estimates By 12%

Today is shaping up negative for Pliant Therapeutics, Inc. (NASDAQ:PLRX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the four analysts covering Pliant Therapeutics provided consensus estimates of US$12m revenue in 2021, which would reflect a sizeable 22% decline on its sales over the past 12 months. Losses are supposed to balloon 30% to US$2.82 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$13m and losses of US$2.73 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Pliant Therapeutics

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 82% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.0% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Pliant Therapeutics to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Pliant Therapeutics. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Pliant Therapeutics' revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Pliant Therapeutics after today.

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 Pliant Therapeutics going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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