GW Pharmaceuticals: High Expectations for this Hemp Stock
Despite the ongoing bear market, certain hemp stocks remain attractive due to the rapidly growing global marijuana industry. Most pot stocks are trading significantly lower than their record highs as they have been impacted by a range of structural issues as well as the COVID-19 pandemic. However, some hemp stocks are better poised than most to handle the downturn. One company in the cannabis industry that is outperforming peers is GW Pharmaceuticals (NASDAQ: GWPH) and we have high expectations for this hemp stock.
GW Pharmaceuticals stock is trading at $126 which is 30% below its 52-week high. Despite this pullback, GW has generated massive wealth for early investors. The stock went public back in January 2012 and has since returned a staggering 1,300%. Comparatively, the S&P 500 has gained just below 100% in this period.
GW Pharma is a leading medical marijuana player
GWPH is a biopharmaceutical company that is focused on the development and commercialization of novel therapeutics from its proprietary cannabinoid product platform, targeting a broad range of diseases.
Over the course of 20 years, GW has managed to establish a leading position in the plant-derived cannabinoid therapeutics space by proven drug discovery and development processes.
Similar to many pharmaceutical companies, GW carries certain risks. One primary risk associated with pharma companies is their revenues are generally dependent on a single drug. For GWPH this drug is Epidiolex, which is approved for the treatment of seizures associated with Lennox-Gastaut syndrome or LGS and Davet syndrome in patients above the age of two.
Epidiolex is a pharmaceutical formulation of CBD for which GWPH has retained global commercial rights. In the first quarter of 2020, GW Pharmaceuticals revenue rose over 200% year-over-year to $120.6 million, up from $39.2 million in the prior-year period. Epidiolex accounted for 96% or $116.1 million of total sales in Q1.
Epidiolex was launched in the U.S. in 2018 and it received approval from the European Commission to use the drug as adjunctive therapy for the above two diseases last September. Epidiolex was launched in Germany and the U.K and will shortly launch in France, Italy, and Spain.
However, this medical marijuana company is also looking to diversify its portfolio via other cannabis-based drugs such as Sativex.
Is GW Pharmaceuticals stock a buy?
While GW Pharmaceuticals carries certain risks, it is one of the top marijuana stocks in the cannabis industry. The company is expected to post non-GAAP earnings per share (EPS) of $3.42 in 2021, indicating a forward price to earnings of 37x.
Comparatively, analysts expect the company to increase earnings by a massive 614% annually in the next five years. The average 12-month target price for the hemp stock stands at $191 which is 50% above its current trading price.
For these reasons, we have high expectations for this hemp stock and think it’s a wise play for anyone looking to diversify their portfolio with hemp stocks.
GW Pharmaceuticals: High Expectations for this Hemp Stock
About Cannin: Your Hemp Stock Experts
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