HRMY Stock Study (10-17-26)

Posted by Mark on October 23, 2026 at 07:28 | Last modified: October 18, 2026 09:11

I recently did a stock study on Harmony Biosciences Holdings Inc. (HRMY, $119.97).

M* writes:

     > Harmony Biosciences Holdings Inc is a commercial-stage pharmaceutical
     > company focused on developing and commercializing therapies for patients
     > living with rare neurological diseases who have unmet medical needs.
     > The company has one reportable segment: rare neurological diseases. Its
     > product WAKIX (pitolisant) is a molecule with a novel mechanism of
     > action specifically designed to increase histamine signaling in the brain
     > by binding to H3 receptors and is used for the treatment of cataplexy
     > in adult patients with narcolepsy. The other drug candidates in its
     > pipeline are Pitolisant, HBS-102 (MCHR1 antagonist), BP1.15205
     > (orexin-2 receptor agonist), ZYN002 (cannabidiol gel), EPX-100
     > (clemizole hydrochloride), and EPX-200 (lorcaserin), among others.

Since 2021 when profitability commences, this small-size company grows sales and EPS at annualized rates of 29.4% and 33.8%, respectively. Lines are mostly up, straight, and parallel except for EPS decline in ’23. Five-year EPS R^2 is 0.47, and Value Line (VL) gives an Earnings Predictability score of 40. Shares outstanding decrease 1.2% (0.3% per year).

Since 2021, PTPM leads peer and industry averages while increasing from 12.3% to 24.8% (’25) with a last-5-year mean of 23.5%. ROE leads peer and industry averages despite decreasing from 22.4% to 18.7% (’25) with a last-5-year mean of 28.3% (shareholder equity consistently positive and increasing a whopping 47.0% per year). Debt-to-Capital is less than peer averages but greater than the industry despite falling from 50.7% to 15.8% (’25) with a last-5-year mean of 29.9%.

Quick ratio is 3.33 and interest coverage 17.1 per M* who assigns no economic moat and a B grade for Financial Health (per BI website). VL gives a B+ rating for Financial Strength.

RightStock—a new tool on the BI website that I am tracking for informational purposes—gives a fitness score of 74 (“moderate”) and opportunity score of 100 (“excellent,” citing 0.8 PEG).

With regard to sales growth:

• YF gives YOY ACE 18.6% and 13.2% for ’26 and ’27, respectively (based on 12 analysts).
• Zacks gives YOY ACE 19.2% and 11.3% for ’26 and ’27, respectively (4 analysts).
• CFRA projects 18.7% YOY and 15.8% per year for ’26 and ’25-’27.
• M* offers a 2-year annualized ACE of 17.8%.

My 16.0% forecast is roughly middle of the short-term range (no long-term estimates available).

With regard to EPS growth:

• MarketWatch gives ACE 17.8% and 15.5% per year for ’25-’27 and ’25-’28 (based on 12 analysts).
• Nasdaq.com gives ACE 10.3% and 14.2% per year for ’26-’28 and ’26-’29 [7 / 4 / 1 analyst(s) for ’26 / ’28 / ’29].
• Seeking Alpha projects 4-year annualized growth of 33.2%.
• Finviz gives 5-year annualized ACE of 22.0% (4).
• YF gives YOY ACE of 45.0% and 34.1% for ’26 and ’27, respectively (2).
• Zacks gives YOY ACE 39.8% and 7.1% for ’26 and ’27 along with 5-year annualized 33.2% (6).
• VL gives 5-year annualized ACE of 28.7% (7).
• CFRA projects 92.6% YOY (puzzling) and 62.7% per year for ’26 and ’25-’27, respectively.

My 20.0% forecast is below the long-term-estimate range (mean of four: 29.2%). Initial value is ’25 EPS of $2.71/share rather than 2026 Q2 EPS of $3.08 (TTM).

My Forecast High P/E is 13.0. Since 2022 (excluding ’21 upside outlier of 77.9), high P/E ranges from 15.1 in ’25 to 26.1 in ’23 with mean of 19.7 and a mean average P/E of 14.8. I am below the range.

My Forecast Low P/E is 9.0. Since 2022 (excluding ’21 upside outlier of 43.3), low P/E ranges from 8.7 in ’23 to 11.2 in ’24 with a mean of 10.0. I am forecasting near bottom of the four-data-point range (only ’23 is less).

My Low Stock Price Forecast (LSPF) of $24.40 is default based on initial value from above: 35.7% less than previous close and 4.3% less than the 52-week low.

These inputs land HRMY in the BUY zone with a U/D ratio of 3.7. Total Annualized Return (TAR) is 18.2%.

PAR (using Forecast Average—not High—P/E) of 14.3% is good for a medium-size company. If a solid margin of safety (MOS) backs this study then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 26 studies done in the past 90 days (my study and three outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 16.0%, 13.5%, 18.0, and 10.0. I am higher on EPS growth.

MS high / low EPS are $5.87 / $3.07 versus my $6.74 / $2.71 (per share). My high EPS is greater due to higher EPS growth.

MS LSPF of $25.50 implies a Forecast Low P/E of 8.3: less than the above-stated 10.0. MS LSPF is 16.9% less than the default $3.07/share * 10.0 = $30.70. MS LSPF is still 4.5% greater than mine, though.

MOS is robust in the study because my inputs are equal to or less than most historical/analyst/MS estimates/ranges. Supporting the MOS is MS TAR exceeding mine by 3.1% per year.

With regard to valuation, PEG is 0.3 and 0.5 per Zacks and my projected P/E, respectively: significantly undervalued. Relative Value [(current P/E) / 5-year-mean average P/E] is somewhat cheap at 0.83. M* reports stock at a 18% discount.

I question whether many studies in MS are using unreasonably low EPS estimates. Not only am I higher than MS on EPS growth, which may be a first, only one study of 26 is even equal to mine with all others lower. Four studies actually use 6.0% EPS growth (alongside 18.5% sales growth). I consider that extreme.

Per U/D, HRMY is a BUY right now under $40/share. [87.6 / ((14.87 / 100 ) +1 ) ^ 5] ~ $44 meets the BetterInvesting® TAR criterion given forecast high price ~$88.

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