We came across a bullish thesis on Harrow, Inc. (HROW) on Simon’s Substack by Simon. In this article, we will summarize the bulls’ thesis on HROW. HROW Technologies, Inc.’s share was trading at $44.07 as of Sept 27th. HROW’s trailing P/E was 9.64 according to Yahoo Finance.
A pharmacist discussing with a patient wearing a face mask, examining their eye to diagnose a macular degeneration.
Harrow (NASDAQ: HROW) is a U.S. pharmaceutical company that develops, produces and sells ophthalmic drugs. Its primary focus is on eye care, providing medications for various conditions. Harrow’s main products include Iheezo, a local anesthetic, and Vevye, a dry-eye treatment. They also run a compounding pharmacy business called ImprimisRx.
Harrow’s revenue grew by about 40% compared to the same period in 2023 across all business segments in which the dry-eyes drug Vevye took off significantly. However, operating expenses and cost of sales rose faster than revenue leading to losses. Despite this, Harrow’s strong revenue growth positions them as a dynamic company in the pharmaceutical industry.
Investing in Harrow is appealing because its direct-to-provider model reduces distribution costs, which can improve their profit margins over time. Harrow’s diverse revenue streams, including high-growth areas like dry-eye treatments and surgical anesthesia, provide stability and multiple growth opportunities. Although Harrow is not yet profitable, their revenue growth is expected to outpace rising expenses in the future. The company’s management is focused on scaling the business, and as they grow, their operating efficiency should improve, leading to profitability. CEO Mark Baum’s leadership and successful product launches add confidence in Harrow’s growth potential.
Harrow’s stock has been reaching new highs, reflecting investor optimism about their expansion and market penetration. While costs are rising, their ability to raise capital and strong leadership provide a solid foundation for future growth. Overall, Harrow is an attractive investment in the pharmaceutical sector, offering long-term potential through innovative products and market opportunities.
Harrow, Inc. is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held HROW at the end of the second quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of HROW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HROW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.