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MARKETS LIVE BLOG:

STOCKS SLIDE AFTER META'S REALITY CHECK, DOWNBEAT GDP

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What's in Store for GW Pharmaceuticals' (GWPH) Q4 Earnings?

Zacks Equity Research

GW Pharmaceuticals plc GWPH is slated to release fourth-quarter and full-year 2019 results on Feb 25.

In the last reported quarter, it posted a positive earnings surprise of 44.8%. The company reported better-than-expected earnings in all of the trailing four quarters, the average positive beat being 40.7%.

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

Key Catalysts

For the past few months, the company has been witnessing continued rise in demand and market acceptance for Epidiolex in the United States, as a growing number of physicians are recommending this drug in their prescriptions. This high level of market penetration is likely to have continued in the fourth quarter as well.

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Notably, Epidiolex, as the first cannabis-derived drug for patients with Lennox-Gastaut syndrome (LGS) and Dravet syndrome, is fast capturing the market since its November 2018 launch in the United States.

GW Pharmaceuticals PLC Price and EPS Surprise

GW Pharmaceuticals PLC Price and EPS Surprise
GW Pharmaceuticals PLC Price and EPS Surprise

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

Through the second half of 2019, the company commercialized Epidiolex, beyond the United States, in select European countries. Markedly, the European Commission’s approval for Epidiolex’s marketing authorization for patients aging more than two years is anticipated to have aided the company’s quarterly revenues.

In terms of coverage determination, the company continues to increase payor access. It earlier expected this to have continued in the fourth quarter as well.

Sativex, which is used to treat muscle spasms, has been gaining popularity. The company believes this will get reflected in its quarterly performance. The CBDV program, which has been performing well, is expected to have continued its stellar performance in the December-end quarter as well.

Preliminary Sales Results

Going by the company’s preliminary announcement for the fourth-quarter and full-year 2019 net product sales, GW Pharmaceuticals expects to report total net product sales of around $108 million in the quarter and approximately $309 million for the year.

Epidiolex’s net product sales are projected at $104 million for the October-December period and   $296   million   for   the   full   year.

Q4 Estimates

The Zacks Consensus Estimate for total revenues of $104.9 million suggests significant growth from the prior quarter’s $6.7 million. The consensus mark for loss per share is pegged at 52 cents, 77.9% narrower than the loss of $2.35 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 -1.94%. 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Tandem Diabetes Care, Inc. TNDM currently sports a Zacks Rank of 1 and has an Earnings ESP of +86.44%.

Nevro Corp. NVRO carries a Zacks Rank of 2 and has an Earnings ESP of +3.45%, at present.

HealthEquity, Inc. HQY holds a Zacks Rank #3 and has an Earnings ESP of +18.56%, currently.

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HealthEquity, Inc. (HQY) : Free Stock Analysis Report
 
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Nevro Corp. (NVRO) : Free Stock Analysis Report
 
Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report
 
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Zacks Investment Research