Yahoo Finance Analysts Just Made A Major Revision To Their Prothena Corporation plc (NASDAQ:PRTA) Revenue Forecasts
Market forces rained on the parade of Prothena Corporation plc (NASDAQ:PRTA) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 7.0% to US$55.76 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the latest downgrade, the current consensus, from the ten analysts covering Prothena, is for revenues of US$25m in 2023, which would reflect a disturbing 53% reduction in Prothena's sales over the past 12 months. Losses are supposed to balloon 74% to US$3.87 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$48m and losses of US$3.73 per share in 2023. 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 Prothena
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 53% by the end of 2023. This indicates a significant reduction from annual growth of 59% 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 15% annually for the foreseeable future. It's pretty clear that Prothena's revenues are expected to perform substantially worse than 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 Prothena. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Prothena's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Prothena after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Prothena analysts - going out to 2025, 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.
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