Value
7.2/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 4.4 |
| Analyst target | 9.0 |
- ▸Attractively valued
PRTA · Why this verdict
Why Prothena Corporation (PRTA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Prothena is a cash-burning, speculative biotech with weak quality, but heavy insider buying of $6.2M and 127% analyst upside to an $18.62 target make it a high-risk, high-reward recovery bet.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Insiders bought $6.2M of stock over 90 days, 1.476% of market cap, across 11 purchases with only 2 small sales, and institutions are accumulating. Insider breakdown | Insider buying persists and net insider flow stays positive over the next 12 months. | ↑Improving |
| CounterInsider purchases in a binary-outcome biotech do not guarantee clinical success, and a bear case notes 27 prior sells flagged as material insider selling. | ||
The analyst target of $18.62 implies 127.0% upside from the $8.20 price, with reward-to-risk of 12.24 against 10.4% downside to the stop. Upside pct | Price re-rates toward the analyst target if clinical or partnership milestones are met. | →Stable |
| CounterCoverage is light with only 5 analysts and the target has already been haircut by 13%, so it can be cut quickly after a trial setback. | ||
Prothena is cash-burning with free cash flow at -99% of revenue, a Piotroski F-Score of 3/9 and no competitive moat, putting quality at 1.8, below the 4.0 floor. Quality breakdown | Cash burn narrows and the F-Score improves to at least 5 as milestone revenue arrives. | →Stable |
| CounterRevenue is lumpy and tiny (a $1.0M quarter in June 2026 after $51.1M in March), so burn could persist until a successful launch or partner payment. | ||
Price is below a 200-day average sloping down 2.4% per 30 days, with short interest at 19% and implied volatility at 209%. Momentum breakdown | Price reclaims the 200-day average and short interest declines below 15%. | ↑Improving |
| CounterA confirmed downtrend with 19% short interest suggests informed sellers see risk, and extreme volatility can drive sharp losses. | ||
Earnings results are mixed with 2 beats, 1 inline and 1 miss over the last four quarters, including a swing to $0.68 in May 2026 against a $-0.30 estimate, while the next report is due in 12 days. Last 4 quarters | Quarterly losses narrow toward breakeven and results track estimates in the November 2026 report. | →Stable |
| CounterThe large beats come from one-time milestone revenue rather than a recurring business, so surprises are not predictive of future results. | ||
Insiders bought $6.2M of stock over 90 days, 1.476% of market cap, across 11 purchases with only 2 small sales, and institutions are accumulating.
↑ImprovingInsider breakdown
- Expectation
- Insider buying persists and net insider flow stays positive over the next 12 months.
CounterInsider purchases in a binary-outcome biotech do not guarantee clinical success, and a bear case notes 27 prior sells flagged as material insider selling.
The analyst target of $18.62 implies 127.0% upside from the $8.20 price, with reward-to-risk of 12.24 against 10.4% downside to the stop.
→StableUpside pct
- Expectation
- Price re-rates toward the analyst target if clinical or partnership milestones are met.
CounterCoverage is light with only 5 analysts and the target has already been haircut by 13%, so it can be cut quickly after a trial setback.
Prothena is cash-burning with free cash flow at -99% of revenue, a Piotroski F-Score of 3/9 and no competitive moat, putting quality at 1.8, below the 4.0 floor.
→StableQuality breakdown
- Expectation
- Cash burn narrows and the F-Score improves to at least 5 as milestone revenue arrives.
CounterRevenue is lumpy and tiny (a $1.0M quarter in June 2026 after $51.1M in March), so burn could persist until a successful launch or partner payment.
Price is below a 200-day average sloping down 2.4% per 30 days, with short interest at 19% and implied volatility at 209%.
↑ImprovingMomentum breakdown
- Expectation
- Price reclaims the 200-day average and short interest declines below 15%.
CounterA confirmed downtrend with 19% short interest suggests informed sellers see risk, and extreme volatility can drive sharp losses.
Earnings results are mixed with 2 beats, 1 inline and 1 miss over the last four quarters, including a swing to $0.68 in May 2026 against a $-0.30 estimate, while the next report is due in 12 days.
→StableLast 4 quarters
- Expectation
- Quarterly losses narrow toward breakeven and results track estimates in the November 2026 report.
CounterThe large beats come from one-time milestone revenue rather than a recurring business, so surprises are not predictive of future results.
Per-dimension breakdown
Quality
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Net margin | 0.0 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 4.0 |
| Piotroski F | 3.3 |
- ▸Cash-burning: FCF -99% of revenue
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
- ▸Quality concerns
Growth
5.0/10data confidence 50%Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.6 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 5.4 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.1%/30d — confirmed downtrend
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.5 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
- ▸Analyst upside: 135%
Insider
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 9.0 |
| insider conviction | 8.0 |
| holder change | 8.3 |
| notable moves | 7.0 |
- ▸Heavy insider buying — $7,572,109 (1.621% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 3.9 |
| growth rank | 0.8 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.3 |
| 52w position | 5.4 |
| gap | 6.0 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.6 |
| days to cover | 0.0 |
| volatility | 1.4 |
| put call | 10.0 |
| implied vol | 0.0 |
| debt equity | 9.9 |
- ▸High short interest justified: 19%
- ▸High IV: 166%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings in 7 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:6.7>=5.5
- ASYMMETRY:7.3>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:7d<=7d
Warning (1)
- DEATH_CROSS:momentum=6.7>=5.0 recovering
Reward-to-Risk
7.32
Upside
+104.6%
Downside
14.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 59
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The SELL_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 7d<=7d outcome against Insider at 8.1 and asymmetric R:R of 7.32.
The strongest dimensions are Insider at 8.1, Value at 7.2, and Sentiment at 7.2; the weakest are Quality at 1.8, Technical at 3.2, and Risk (lower is worse) at 3.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 7.32 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Heavy Insider Buying Conviction
Trip ifInsider net selling exceeds $1M over 90 days with 0 insider purchases.
- P2Large Analyst Upside
Trip ifAnalyst target falls below $12, cutting upside to less than 45%.
- P3Cash Burn Weak Quality
Trip ifFree cash flow remains below -100% of revenue for 2 consecutive quarters.
- P4Confirmed Downtrend And High Short Interest
Trip ifShort interest rises above 25% of float.
- P5Inconsistent Earnings Reporting
Trip ifQuarterly EPS falls below -$0.60 for 2 consecutive quarters.