Will Prothena Stock Rebound After A 13% Drop Last Week?

[Updated: 6/23/2021] PRTA Stock Decline

The stock price of Prothena Corporation (NASDAQ: PRTA), a biotechnology company focused on treatment of diseases that involve protein misfolding or cell adhesion, has seen a a large 13% drop over the last five trading days. The decline in PRTA stock came after another pharmaceuticals company, Biogen, announced that it will discontinue the development of Gosuranemab, an investigational anti-tau (a type of protein) antibody against Alzheimer’s disease. This decision was taken after Gosuranemab failed to meet the primary efficacy endpoint in a phase two clinical trial. Now this development has impacted Prothena, as well, given that it is working on a treatment for Alzheimer’s disease targeting the tau protein with its PRX-005. The investors are concerned that if Biogen’s anti-tau failed to meet its endpoint, it may apply to other players as well.

Now that PRTA stock has fallen 13% in just five days, will it resume its downward trajectory over the coming weeks, or is a rise in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s historical stock price data, returns for PRTA stock average nearly 8% in the next one-month (21 trading days) period after experiencing a 13% drop over the previous week (five trading days).

But how would these numbers change if you are interested in holding PRTA stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Prothena stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

Some Fun Scenarios, FAQs & Making Sense of Prothena Stock Movements:

Question 1: Is the average return for Prothena stock higher after a drop?

Answer: Consider two situations,

Case 1: Prothena stock drops by -5% or more in a week

Case 2: Prothena stock rises by 5% or more in a week

Is the average return for Prothena stock higher over the subsequent month after Case 1 or Case 2?

PRTA stock fares better after Case 1, with an average return of 5.9% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 4.6% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Prothena stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Prothena stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For PRTA stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Prothena after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although PRTA stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for Prothena stock by changing the inputs in the charts above.

[Updated: 4/16/2021] Prothena Stock Rise

The stock price of Prothena Corporation (NASDAQ: PRTA), a biotechnology company focused on treatment of diseases that involve protein misfolding or cell adhesion, has seen a 9% rise over the last five trading days, after the company announced that PRX004 phase 1 study results were selected for Emerging Science Oral Presentation at AAN 2021. PRX004 is an investigational anti-amyloid immunotherapy for the treatment of ATTR amyloidosis. Earlier in December 2020, the company announced positive results from early clinical trials for the treatment. The transthyretin amyloidosis market itself has a huge growth potential with estimated size of $14 billion in 2029, compared to a mere $0.6 billion in 2019.

Looking at the recent rally, the 9% rise for PRTA stock over the last five days compares with a 2% rise seen in the broader S&P 500 index. Now, is PRTA stock poised to rise further? It looks that way. The company’s pipeline surely is promising, and based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a 60% chance of a rise in PRTA stock over the next month (twenty-one trading days).

Out of 296 instances in the last eight years that Prothena stock saw a five-day rise of 9% or more, 177 of them resulted in PRTA stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 177 out of 296, or about 60% chance of a gain in PRTA stock over the coming month. See our analysis on Prothena Corporation Stock Chances of Rise for more details.

Five-Days: PRTA 9.2%, vs. S&P500 2%; Outperformed market

(14% likelihood event)

• Prothena stock rose 9.2% over a five-day trading period ending 4/15/2021, compared to broader market (S&P500) rise of 2.0%
• A change of 9.2% or more over five trading days is a 14% likelihood event, which has occurred 299 times out of 2086 in the last eight years

Ten-Days: PRTA 2.1%, vs. S&P500 5.2%; Underperformed market

(46% likelihood event)

• Prothena stock rose 2.1% over the last ten trading days (two weeks), compared to broader market (S&P500) rise of 5.2%
• A change of 2.1% or more over ten trading days is a 46% likelihood event, which has occurred 948 times out of 2081 in the last eight years.

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