2 Cannabis Stocks Outperforming the S&P 500 in 2022

NASDAQ: CARA | Cara Therapeutics, Inc. News, Ratings, and Charts

CARA – The cannabis market is growing significantly due to cannabis’ proven medical usage and the legalization of its recreational use in several parts of the world. The legalization movement is expected to grow stronger in the coming years. Thus, we believe cannabis stocks Cara Therapeutics (CARA) and Valens (VLNS) could be ideal additions to one’s watchlist because these stocks have been outperforming the S&P 500 so far this year. Read on.

The cannabis industry has grown and matured considerably over the past years because it is now being used extensively for medicinal purposes. Cannabis has vast potential due to its proven healing properties for several chronic diseases, which is expected to drive its wider usage. Several biopharmaceutical companies have been increasing their investment in developing an advanced cannabis product line. In addition, as a psychotropic drug, cannabis is seeing high demand in the recreational sector.

The global cannabis market is expected to grow at a 23.9% CAGR to $176.01 billion by 2030. Furthermore, increased legalization of cannabis worldwide for medicinal and recreational purposes is expected to drive the market’s growth in the foreseeable future. In the United States, cannabis is now legal in several states, with public support for cannabis legalization at an all-time high, with the majority of the country supporting federal legalization.

Against this backdrop, we think cannabis stocks Cara Therapeutics, Inc. (CARA) and The Valens Company Inc. (VLNS) could be solid additions to your watchlist now. These stocks have outperformed the benchmark S&P 500 index’s 4.7% decline year-to-date.

Cara Therapeutics, Inc. (CARA)

CARA in Shelton, Conn., is an early commercial-stage biopharmaceutical company focused on developing and commercializing chemical entities in the United States. The company’s lead product is Korsuva injection to treat moderate-to-severe pruritus in adults undergoing hemodialysis. The company is also working on cannabinoid (CB) receptors.

On Feb. 25, 2022, CARA announced that the European Medicines Agency’s (EMA) CHMP had recommended approval of Kapruvia for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in hemodialysis patients. Kapruvia will be the first therapy available in Europe to treat chronic kidney disease in hemodialysis patients if approved, and thus, it should garner significant returns for the company.

In January, the company announced that it had achieved the primary endpoint in its Japanese Phase 3 clinical study of difelikefalin (KORSUVA™) injection for the treatment of pruritus in hemodialysis patients. “This marks another significant step forward toward bringing a first-in-class therapeutic to patients suffering from pruritus worldwide,” said Christopher Posner, President and Chief Executive Officer of Cara Therapeutics.

CARA’s total revenue came in at $821,000 in the fiscal quarter ended Dec. 31, 2021, while its cash and cash equivalents and marketable securities at the end of the period totaled $236.80 million.

For its fiscal year ending Dec. 31, 2022, the consensus EPS estimate represents a 23.4% improvement year-over-year, while the consensus revenue estimate of $62.16 million represents a 169.9% increase year-over-year.

CARA’s shares have gained 1.3% in price year-to-date to close the last trading session at $12.34. Over the past month, the stock has gained 18% in price.

Click here to checkout our Healthcare Sector Report for 2022

The Valens Company Inc. (VLNS)

VLNS develops, manufactures, and sells cannabinoid-based products in Canada and internationally. The Kelowna, Canada-based company produces dried cannabis and hemp biomass products.

VLNS has  provided an update regarding the growth of its recreational national market share. The company is continuously executing business strategies across all its brands in the Canadian recreational market and has also launched new product lines. VLNS expects its product launches to expand its market share while boosting its profitability objectives.

VLNS also announced that it has started manufacturing cannabis-infused beverages at its  Greater Toronto Area facility that is highly automated and can produce more than 8 million units of cannabis per year. This should bolster its operational capability and help strengthen its position in the cannabis-infused beverages market in Canada.

VLNS’ gross revenue for its fiscal year ended Nov. 30, 2021 increased 4.8% year-over-year to CAD90.15 million ($71.80 million). In addition, its adjusted gross profit for the fiscal fourth quarter, ended Nov. 30, 2021, came in at CAD6.27 million ($4.99 million), reflecting an increase of 9.1% quarter-over-quarter, while its adjusted gross profit margin was 34.1%, compared to its 27.4% prior quarter value. 

Analysts expect VLNS’ revenue for the fiscal first quarter, ended Feb. 28,  2022 to come in at $17.04 million, indicating a 6.5% increase year-over-year. Also, the company’s revenue is expected to grow 55.4% year-over-year to $95.80 million in the current fiscal year ending Nov. 30,  2022.

VLNS’ shares have gained marginally year-to-date. The stock gained 18.2% in price over the past month to close the last trading session at $2.47.


CARA shares rose $0.16 (+1.30%) in premarket trading Monday. Year-to-date, CARA has gained 2.63%, versus a -4.33% rise in the benchmark S&P 500 index during the same period.


About the Author: Komal Bhattar


Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...


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