E Is GW Pharmaceuticals Due A Leg Up In 2017?

The fear of the unknown must be wearing off among investors as the legalized marijuana market continues to gain traction. Between 2013 and 2015, legal marijuana stocks experienced one of the best rallies ever, and after a slowdown in the following 12 months, things appear to be looking up again.

There are many players in the market now including pharmaceuticals companies, as well as, fuel companies. Dealers are still exploring several other uses of legalized cannabis as more states in the US continue to embrace it in their legal framework. So far California is the biggest prospect with a projected market size of nearly $8 billion by the year 2021.

Washington, Pennsylvania, and Colorado have a target of close to $2 billion within the next five years while Michigan closes the list of top five with a target of about $1.3 billion. In total, this prediction indicates that by the year 2021, the US legal marijuana market could be worth $15 billion-$20 billion.

Currently, the legal marijuana market is valued at about $7 billion in the US, but some analysts have put the figure close to $10 billion. And in a report published on Bloomberg last year, it’s predicted to hit $50 billion by the year 2026. However, the most valuable pure play legal marijuana stock, GW Pharmaceuticals (NASDAQ:GWPH) currently has a value of just $3.26 billion. So, is GW Pharmaceuticals and other legal marijuana stocks undervalued?

Based on the recent earnings results, it looks like GW Pharmaceuticals is currently fairly valued. The company’s recent quarter revenue was in line with consensus analyst estimates while its earnings beat estimates by $0.58 per share. The stock is currently hovering around its all-time highs at $130.

The company’s drug pipeline is one of its most promising value plays as products continue to move towards FDA approval. This could be what has been holding it back from rallying to its true potential, which when you look at the overall industry projections could be twice its current worth.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor ...

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