Is The 30% Decline In GW Pharmceuticals' Stock This Month Warranted?

GW Pharmaceuticals (GWPH) is a biopharmaceutical company which manufactures drugs derived from cannabis plant strains. The company’s shares have declined 30% in that many days despite its quarterly results beating analyst expectations on top line as well as bottom line. This price decline follows the overall weakness in cannabis stocks over recent months with increased competition and slower-than-expected pace of legalization in key markets weakening investor sentiments against the industry which saw stock prices soar last year on overtly optimistic growth forecasts. That said, we believe that the selloff in GW Pharmaceuticals’ shares has been overdone because of 2 factors. Firstly, the company’s focus on medical marijuana means that its growth prospects aren’t affected by headwinds to the legalization of recreational marijuana use. And secondly, the company has done well to make inroads in Europe’s medical marijuana industry – something we believe will help it garner a sizable chunk of the market in the region going forward.

We step back from these recent swings to review GW Pharmaceuticals performance over the last few years, as a context for what might come next. Our interactive dashboard – Why has GW Pharmaceuticals’ (GWPH) stock price declined by 30% in the last 30 days?, reviews the near term reasons and the big picture.


The context for the last few years:

A closer look At GW Pharmaceuticals Total Revenues over the last few years and the outlook.

Total Revenues for GW Pharmaceuticals substantially increased from $11 Mil in 2017 to $12.7 Mil in 2018; an increase of 15.4%.

This compares with a decline in Total Revenues of 17.9% in 2017, and we expect Total Revenues to jump almost 24x in 2019 thanks to the launch of its drug Epidiolex.


A closer look At GW Pharmaceuticals Total Expenses over the last few years and the outlook.

Total Expense for GW Pharmaceuticals substantially increased from $215.2 Mil in 2017 to $304 Mil in 2018, an increase of 41.3%.

This compares with Total Expense growth of 71.2% in 2017. We expect Total Expense growth to be 1.9% in 2019.


How does GW Pharmaceuticals Revenue Growth compare with rivals?

For more information on how GW Pharmaceuticals’ revenue growth compares with Tilray, Cronos Group and Aphria, view our interactive dashboard analysis.


How has  GW Pharmaceuticals  LBT trended?

Losses Before Tax for GW Pharmaceuticals increased by 42.7% from $204.2 Mil in 2017 to $291.4 Mil in 2018. We expect Loss Before Tax to be $7.9 Mil in 2019.


How has GW Pharmaceuticals Net Income and EPS trended?

For more details about GW Pharmaceuticals’ Net Income and EPS, view our interactive dashboard analysis


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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