To The Moon

In the past five days, $Harrow Health Inc(HROW)$ 's share price has risen by 9.50%.

U.S. stocks rose on Friday after a tame inflation report reinforced expectations that the Federal Reserve will cut interest rates at its final meeting of the year next week. The tech-heavy $NASDAQ(.IXIC)$ led markets higher, rising 0.3% to finish the week up 0.9%. The blue-chip $Dow Jones(.DJI)$ and benchmark $S&P 500(.SPX)$ each advanced 0.2%, bringing their weekly gains to 0.5% and 0.3%, respectively.

The best-performing concepts is Cannabis Concept. Considering the different perceptions of the stock, this time TigerPicks chose $Harrow Health Inc(HROW)$ to have a fundamental highlight to help users understand it better.

In the past five days, $Harrow Health Inc(HROW)$ 's share price has risen by 9.50%.

$Harrow Health Inc(HROW)$

Harrow, Inc. is a provider of ophthalmic disease management solutions. It offers a portfolio of products that address conditions affecting both the front and back of the eye, such as dry eye disease, wet age-related macular degeneration, cataracts, refractive errors, glaucoma and a range of other ocular surface conditions and retina diseases.

Investment Thesis: Profound Undervaluation at an Inflection Point

I believe Harrow is profoundly undervalued as it hits a major strategic and financial inflection point. The current share price of around $40 represents a stark disconnect from my $175 price target for 2026, implying over 300% upside potential.

My conviction is anchored in the company's recent and decisive transition to sustainable profitability, which I expect to trigger an explosion in free cash flow. I project Free Cash Flow per share will surge from approximately $1.20 in 2025 to $4.00 in 2026, and then to $10.00 in 2027.

HROW revenue

Looking to the long-term horizon, I see a clear path for its flagship drug, Vevye, to achieve over $2 billion in sales by 2030—a milestone that could drive a tenfold increase in the company's market capitalization. The market's current valuation of HROW at a mere 10 times my 2026 FCF estimate is, in my view, a significant mispricing of this growth trajectory.

HROW EBITDA

Proven "Pharma-to-Giant" Playbook and Strategic Moat

My confidence in HROW is built on its unique and validated business model, which strategically mirrors the ascent of industry giants. The company's success is not accidental but the result of a brilliant, two-phase playbook.

The first phase involved building ImprimisRx into a dominant, cash-generating leader within the niche ophthalmic compounding pharmacy market. This achieved more than just a profitable foothold; it established deep, trusted relationships with a vast network of eye care prescribers—a critical asset.

The second, transformative phase leverages this proprietary distribution channel to efficiently launch high-margin, FDA-approved branded pharmaceuticals like Vevye directly to this established customer base.

This strategy allows HROW to acquire promising drug assets for minimal upfront capital and achieve commercial success with a capital efficiency that traditional small-cap pharma companies cannot match, creating a durable competitive moat.

Flagship Drug Vevye: A Best-in-Class Product with a Brilliant Go-to-Market Strategy

The crown jewel of HROW's portfolio is Vevye, a drug I am convinced is clinically superior for treating Dry Eye Disease. Its advantages—faster onset of action and a significantly improved side-effect profile—are clear.

DED total market estimate

However, its initial launch faced the typical challenge for a small player: restrictive insurance coverage. Management's response, the "Vevye Access For All" (VAFA) program, was a masterstroke in go-to-market strategy.

By capping patient costs and streamlining access, VAFA allowed Vevye to capture approximately 13% market share by Q4 2025 based purely on clinical merit and a skeleton sales team.

HROW Q3 2025 investor deck

This grassroots success created immense negotiating leverage, culminating in the pivotal victory of securing Tier 1 formulary placement with CVS Caremark, displacing a major competitor. This win is a game-changer that structurally improves the business, lowering patient costs while significantly boosting HROW's revenue per script.

Enormous Market Expansion and a Multi-Product Growth Pipeline

The growth runway for Vevye extends far beyond taking share from existing treatments. Since Vevye and its peer Miebo launched, the total U.S. Dry Eye Disease drug market has been expanding at a 28% CAGR, evidence that better therapies are activating a vast, previously untreated patient population.

I estimate this total addressable market will exceed $6 billion by 2030. Within this expanding landscape, Vevye is positioned to capture a leading share, with a credible path to over $2 billion in annual sales. This outlook is further de-risked and amplified by HROW's broader pipeline.

Assets like Iheezo (already scaling), imminent biosimilars for Lucentis and Eylea, and the future blockbuster potential of drug candidate "Melt" collectively ensure that the company's growth narrative is robust and extends well beyond a single product.

Dismissing the Skeptics: Financial Metrics Are Turning the Tide

The persistent bearish narrative surrounding HROW—questioning its quality, leverage, and cash flow generation—is being decisively invalidated by the financial results.

The facts now speak for themselves: sustained 40%+ revenue CAGR, leverage ratios rapidly falling below 2x and headed towards 1x, and the recent generation of substantial positive free cash flow.

EBITDA margin

I believe 2026 will be the year these positive trends become impossible for the market to ignore. As the company demonstrates accelerating top-line growth alongside soaring profitability and a strengthened balance sheet, the skeptical narrative will collapse.

The combination of high growth and a valuation of just 10x forward free cash flow presents a compelling opportunity that, in my opinion, will soon command a significant market re-rating.

Stock Price Forecast:

Here are the target price forecasts for the next 12 months from analysts.

Based on 8 Wall Street analysts offering 12 month price targets for Harrow Health in the last 3 months. The average price target is $72.67 with a high forecast of $94.00 and a low forecast of $63.00. The average price target represents a 58.84% change from the last price of $45.75.

Resource:

https://seekingalpha.com/article/4848869-harrow-vevye-replaces-xiidra-on-tier-1-formulary-at-cvs

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