Protagonist Therapeutics, Inc. (NASDAQ:PTGX) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Statutory revenue of US$255m and earnings of US$3.26 both blasted past expectations, beating expectations by 112% and 173%, respectively, ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the recent earnings report, the consensus from five analysts covering Protagonist Therapeutics is for revenues of US$238.0m in 2024. This implies a disturbing 24% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to plunge 63% to US$1.01 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$207.5m and earnings per share (EPS) of US$0.72 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$43.50, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Protagonist Therapeutics, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$37.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that revenue is expected to reverse, with a forecast 31% annualised decline to the end of 2024. That is a notable change from historical growth of 54% 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 18% per year. It's pretty clear that Protagonist Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Protagonist Therapeutics' earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Protagonist Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Protagonist Therapeutics analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Protagonist Therapeutics you should know about.

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