GW Pharmaceuticals plc’s (NASDAQ:GWPH) Profit Outlook

GW Pharmaceuticals plc’s (NASDAQ:GWPH): GW Pharmaceuticals plc, a biopharmaceutical company, engages in discovering, developing, and commercializing cannabinoid prescription medicines using botanical extracts derived from the Cannabis plant. With the latest financial year loss of -US$131.69m and a trailing-twelve month of -US$191.34m, the US$4.13b market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on GWPH’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for GWPH’s growth and when analysts expect the company to become profitable.

View out our latest analysis for GW Pharmaceuticals

GWPH is bordering on breakeven, according to Pharmaceuticals analysts. They expect the company to post a final loss in 2019, before turning a profit of US$24.82m in 2020. So, GWPH is predicted to breakeven approximately a couple of months from now! How fast will GWPH have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 72.92% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:GWPH Past Future Earnings June 19th 18
NasdaqGM:GWPH Past Future Earnings June 19th 18

I’m not going to go through company-specific developments for GWPH given that this is a high-level summary, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that GWPH has managed its capital judiciously, with debt making up 3.26% of equity. This means that GWPH has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of GWPH which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at GWPH, take a look at GWPH’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:

  1. Valuation: What is GWPH worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GWPH is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GW Pharmaceuticals’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.