Newsflash: Protagonist Therapeutics, Inc. (NASDAQ:PTGX) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of Protagonist Therapeutics, Inc. (NASDAQ:PTGX) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the six analysts covering Protagonist Therapeutics provided consensus estimates of US$10m revenue in 2023, which would reflect a disturbing 62% decline on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$2.76 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$21m and losses of US$2.55 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Protagonist Therapeutics

The consensus price target was broadly unchanged at US$34.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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 Protagonist Therapeutics analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$28.00. 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.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 62% by the end of 2023. This indicates a significant reduction from annual growth of 9.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. 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 to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Protagonist Therapeutics after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Protagonist Therapeutics' financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other concerns we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.