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Tale of the Tape

Zacks Equity Research

Why GW Pharmaceuticals (GWPH) Could Beat Earnings Estimates Again
October 04, 2016

GWPH

Trades from $3

Looking for a stock that might be in a good position to beat earnings at its next report? ConsiderGW Pharmaceuticals plc (GWPH - Free Report) , a firm in the Medical Products industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, GWPH has beaten estimates by at least 35% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, GWPH expected to post a loss of $1.71 per share, while it actually produced a loss of $1.10 per share, a beat of 35.7%. Meanwhile, for the most recent quarter, the company looked to deliver a loss of $1.73 per share, when it actually reported loss per share of 73 cents per share instead, representing a 57.8% positive surprise.

GW PHARMA-ADR Price and EPS Surprise

 

GW PHARMA-ADR Price and EPS Surprise | GW PHARMA-ADR Quote

Thanks in part to this history, recent estimates have been moving higher for GW Pharmaceuticals. In fact, the Earnings ESP for GWPH is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for GWPH, as the firm currently has a Zacks Earnings ESP of 5.04%, so another beat could be around the corner.

This is particularly true when you consider that GWPH has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that GWPH could see another beat at its next report, especially if recent trends are any guide.

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