GWPH: What Can Investors Expect From GW Pharmaceuticals When it Reports Earnings?

So far earnings seasons in the cannabis sector have been mixed. We have seen some companies miss guidance due to the current market being affected by COVID-19 but we have also seen some companies achieve better than expected results.

During these tough economic times, companies have the opportunity to show us how strong their businesses are and whether or not they can adapt to the ever-changing marketplace.

Today we’re going to focus on GW Pharmaceuticals (GWPH) as we get closer to their next earnings report, scheduled for May 11, 2020.

GWPH focuses on discovering, developing, and commercializing therapies for many conditions, with a concentration on epilepsy. Their flagship epilepsy drug, Epidiolex, is currently approved by the FDA and being used throughout the US.

Before Epiolodex there have been treatments for epilepsy but many of those options carried harsh side effects. Epidiolex is derived from pure CBD and is viewed as a much more natural treatment for epilepsy, with far fewer side effects.

GWPH has created a loyal and expanding customer base that will most likely continue to use their products for the rest of their lives. In terms of competition, GWPH has multiple patents and has invested billions of dollars into research and development which makes it very hard for others to compete.

It’s our opinion that the crisis caused by COVID-19 will not have much of an effect for Epidiolex sales. People that suffer from epilepsy need their medication, even during a global pandemic.

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GWPH has already begun to launch Epidiolex in Europe, with sales starting in Germany in Q4 2019 and sales in the UK starting in Q1 2020. France, Spain, and Italy are expected to follow later in the year. We expect the European market to give the company a significant boost in revenues with very little additional costs. By the end of 2020, we are optimistic that GWPH could achieve profitability which will solidify its business model and ease investor concerns.

The company’s last earnings report was released on February 25th, 2020. GWPH reported a loss of $0.84 per share for the quarter, which missed analysts’ estimates by $0.32.

Revenue came in at $109.1 million for the quarter, which beat analyst expectations of $80.92 million. Revenues skyrocketed 1,528.4% on a year-over-year basis due to their 2019 approval of Epidiolex.

When it comes to their upcoming quarter analysts are expecting the company to post a loss of $0.87 cents per share. The stock has a total of 14 Buy ratings from Wall Street analysts and a consensus price target of $193, indicating about an 80% upside from its current price.

Though cannabis companies have experienced challenging times recently, we are optimistic that GWPH could see a solid quarter when it reports earnings in May and continue to grow as the year proceeds, even during this coronavirus crisis.

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GWPH shares . Year-to-date, GWPH has declined -4.23%, versus a -9.22% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaron Missere

Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...