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What's in Store for GW Pharmaceuticals (GWPH) in Q1 Earnings?

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GW Pharmaceuticals plc (GWPH - Free Report) is slated to release first-quarter 2020 results on May 11.

In the last-reported quarter, the company delivered a negative earnings surprise of 1.11%. However, the company reported better-than-expected earnings in the remaining three quarters, with the average four-quarter positive surprise being 20.1%.

Let's discuss the factors that are likely to have influenced the company's performance in the first quarter.

Key Catalysts

For the past few months, GW Pharmaceuticals has been witnessing continued rise in demand and market acceptance for Epidiolex in the United States, as a growing number of physicians have been recommending the drug in their prescriptions. This high level of market penetration is likely to have aided the company’s performance in the first quarter as well.]

GW Pharmaceuticals PLC Price and EPS Surprise

GW Pharmaceuticals PLC Price and EPS Surprise

GW Pharmaceuticals PLC price-eps-surprise | GW Pharmaceuticals PLC Quote

Notably, Epidiolex, as the first cannabis-derived drug for patients with Lennox-Gastaut syndrome (LGS) and Dravet syndrome, is fast capturing the market in the United States.

Internationally, in September 2019, GW Pharmaceuticals achieved the European Commission’s approval for Epidiolex’s marketing authorization for use in patients aged more than two years. Since then, the company has expanded Epidiolex’s foothold in select European countries (Germany, UK, France Italy and Spain).The first commercial launch took place in Germany in late 2019. Epidiolex was formally launched in the UK in late January with centralized funding by NHS England. In France, Epidiolex was made available recently and reimbursed by the National ATU program, which supports early patient access to important new medicines and serious diseases.All these developments are anticipated to have aided the company’s first-quarter international revenues.

In February, the company regained exclusive commercialization rights for its other popular drug Sativex or nabiximols (delta-9-tetrahydrocannabinol [THC] and cannabidiol [CBD]) in the United Kingdom from life science company Bayer. Sativex is indicated for the treatment of spasticity due to multiple sclerosis. Its quarterly performance is likely to have benefited from this development.

However, with the pandemic making the healthcare industry defer all non-COVID 19 procedures, GW Pharmaceutical’s expansion in Europe and overseas is expected to have taken a backseat in the first quarter. The manufacture and supply halts and stay-at-home restrictions in United States may have delayed all testing related developments for the company. However, the magnitude of the loss will be determined once the company reports.

Q1 Estimates

The Zacks Consensus Estimate for total revenues of $108.1 million suggests significant growth of 175.5% from the year-ago quarter. The consensus mark for loss per share is pegged at 87 cents, which indicates 48.2% narrower loss than $1.68 reported in the year-earlier period.

What Our Quantitative Model Predicts

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. But this is not the case here as you will see below.

Earnings ESP: GW Pharmaceuticals has an Earnings ESP of -1.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: GW Pharmaceuticals currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter.

Health Catalyst Inc (HCAT - Free Report) carries a Zacks Rank of 1 and has an Earnings ESP of +7.26%, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Brainsway Ltd Sponsored ADR (BWAY - Free Report) holds a Zacks Rank #2 and has an Earnings ESP of +3.23%.

AMN Healthcare Services Inc (AMN - Free Report) currently has a Zacks Rank of 3 and an Earnings ESP of +0.32%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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