Growth Investors: Industry Analysts Just Upgraded Their Protagonist Therapeutics, Inc. (NASDAQ:PTGX) Revenue Forecasts By 28%

Celebrations may be in order for Protagonist Therapeutics, Inc. (NASDAQ:PTGX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Protagonist Therapeutics will make substantially more sales than they'd previously expected.

After the upgrade, the consensus from Protagonist Therapeutics' seven analysts is for revenues of US$34m in 2022, which would reflect a substantial 28% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$3.14 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$26m and losses of US$3.48 per share in 2022. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Protagonist Therapeutics

The consensus price target fell 16%, to US$43.57, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Protagonist Therapeutics, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$30.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 36% by the end of 2022. This indicates a significant reduction from annual growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. It's pretty clear that Protagonist Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Protagonist Therapeutics' prospects. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Protagonist Therapeutics.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Protagonist Therapeutics analysts - going out to 2024, 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.