Protagonist Therapeutics, Inc. (NASDAQ:PTGX) Analysts Just Slashed This Year's Estimates

One thing we could say about the analysts on Protagonist Therapeutics, Inc. (NASDAQ:PTGX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the six analysts covering Protagonist Therapeutics provided consensus estimates of US$15m revenue in 2021, which would reflect a stressful 53% decline on its sales over the past 12 months. Losses are supposed to balloon 39% to US$2.53 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$19m and losses of US$2.29 per share in 2021. 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.

See our latest analysis for Protagonist Therapeutics

The consensus price target lifted 20% to US$60.00, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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$93.00 per share, while the most pessimistic values it at US$50.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past three years, revenues have declined around 22% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 78% decline in revenue until the end of 2021. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.4% annually. So while a broad number of companies are forecast to grow, unfortunately Protagonist Therapeutics is expected to see its sales affected worse than other companies in the 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. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

There might be good reason for analyst bearishness towards Protagonist Therapeutics, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

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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