Pliant Therapeutics, Inc. (NASDAQ:PLRX) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Pliant Therapeutics, Inc. (NASDAQ:PLRX) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to US$31.15 in the week after its latest quarterly results. Revenues fell badly short of expectations, with sales of US$2.2m being some 32% below what the analysts had forecast. Statutory losses were in line with forecasts, with Pliant Therapeutics losing US$0.64 a share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Pliant Therapeutics

Taking into account the latest results, the current consensus from Pliant Therapeutics' four analysts is for revenues of US$16.0m in 2021, which would reflect a modest 6.0% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$2.82 per share. Before this latest report, the consensus had been expecting revenues of US$13.3m and US$2.73 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the revenue growth will not be achieved without incremental costs.

It will come as a surprise to learn that the consensus price target rose 8.8% to US$51.50, with the analysts clearly more interested in growing revenue, even as losses intensify. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Pliant Therapeutics analyst has a price target of US$63.00 per share, while the most pessimistic values it at US$40.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Pliant Therapeutics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 8.0% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 82% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.8% per year. So it looks like Pliant Therapeutics is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Pliant Therapeutics going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Pliant Therapeutics you should be aware of, and 1 of them can't be ignored.

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