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Why Is Prothena (PRTA) Down 8.9% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Prothena (PRTA). Shares have lost about 8.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Prothena due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Prothena Reports Q2 Loss, Revenues Miss

Prothena reported mixed results for the second quarter of 2019. The company reported a loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 56 cents and the year-ago quarter’s loss of $1.50.

Quarterly revenues came in at $0.17 million, missing the Zacks Consensus by 22.33%. Revenues were also down from $0.28 million in the year-ago quarter. Revenues mainly came from the company’s collaboration with Roche Holdings.

Quarter in Detail

R&D expenses were $9.6 million, down 69.5% year over year due to lower clinical trial costs, and to a lesser extent lower product manufacturing expenses, lower personnel costs and lower consulting costs.

General and administrative (G&A) expenses came in at $9.1 million, down from $11 million in the year-ago quarter.

As of March 31, 2019, Prothena had $398.1 million in cash, cash equivalents and restricted cash.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 5.26% due to these changes.

VGM Scores

Currently, Prothena has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Prothena has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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Zacks Investment Research