The latest analyst coverage could presage a bad day for Protagonist Therapeutics, Inc. (NASDAQ:PTGX), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. At US$37.59, shares are up 4.4% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the consensus from ten analysts covering Protagonist Therapeutics is for revenues of US$94m in 2025, implying a concerning 78% decline in sales compared to the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$1.20 per share in 2025. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$128m and losses of US$1.02 per share in 2025. 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 Protagonist Therapeutics

There was no major change to the consensus price target of US$58.30, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

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 78% by the end of 2025. This indicates a significant reduction from annual growth of 70% 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 20% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Protagonist Therapeutics is expected to lag 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 Protagonist Therapeutics. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of 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 2027, 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 backed by insiders.

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