Last Update 19 Dec 25

Fair value Increased 40%

HROW: Expanded Ophthalmic Pipeline Is Expected To Drive Stronger Long Term Earnings Power

Analysts have raised our Harrow fair value estimate to $59 from $42, reflecting higher modeled revenue growth, improving margin expectations, and a wave of increased Street price targets following stronger quarterly results and an expanded product and biosimilar pipeline.

Analyst Commentary

Recent Street commentary on Harrow has been broadly constructive, with multiple firms lifting price targets in response to stronger quarterly results, expanding ophthalmic franchises, and a more visible biosimilar contribution. The consensus remains that Harrow is well positioned to deliver above market growth as newer launches, including Vevye and ophthalmic biosimilars, scale over the next several years.

Several research teams emphasize that the combination of an expanding product portfolio, higher than previously modeled gross margins, and operating leverage from existing commercial infrastructure supports a re-rating of the shares. Updated models generally incorporate higher revenue trajectories through 2027, particularly as management targets $250M plus in quarterly revenue by the end of that period.

At the same time, there is growing recognition that near term execution against ambitious targets, especially for newer products and biosimilars, will be critical to justifying the recent upward revisions to fair value estimates. Commentary around the timing and magnitude of contribution from biosimilar assets, as well as the pace of Vevye adoption, has become an important driver of valuation debates.

Some Street models now assume meaningful revenue from ophthalmic biosimilars beginning in 2026. If achieved, this could support sustained top line acceleration and margin expansion. However, analysts acknowledge that commercial strategy for these assets is still evolving, and investors are likely to look for more detailed guidance and early launch metrics to gain confidence in these out year assumptions.

For Vevye, the tone of research has shifted from early launch optimism to a more data driven assessment of prescription trends, reimbursement access, and the ramp required to meet management’s medium term revenue aspirations. Where modeled appropriately, analysts argue that Vevye’s contribution can justify premium multiples. They also stress that even modest shortfalls versus guidance may have an outsized impact on sentiment given the stock’s strong run.

Against this backdrop, valuation discussion is increasingly framed around the balance between upside from successful execution on multiple growth drivers and downside risk if the company stumbles on any major product or market access milestone. While the base case across most notes remains positive, the language around risk factors has become more explicit, reflecting higher expectations embedded in current targets.

A key focus for the Street is the company’s ability to translate product breadth into durable, high quality earnings growth rather than just near term revenue spikes. Analysts highlight that sustained share gains in dry eye and retinal segments, as well as effective integration and commercialization of pipeline assets, will be necessary to support the upper end of current price target ranges.

Several notes also underscore the importance of upcoming data disclosures and investor communications, including analyst days and product specific updates, as catalysts that could either validate bullish assumptions or prompt recalibration of growth trajectories. The Street is looking for clearer visibility into payer dynamics, competitive responses, and the pace of physician adoption across key franchises.

Overall, the tonal shift is toward a more balanced, execution focused framework, where upside is recognized but more tightly linked to measurable milestones. This evolving narrative leaves room for both positive and negative surprise relative to consensus, making the path of estimate revisions and incremental news flow particularly important for the stock’s near to medium term performance.

Bearish Takeaways

Bearish analysts point to the risk that Vevye revenues, while growing, could fall short of management’s medium term targets, which would pressure premium valuation multiples that now embed aggressive adoption assumptions.
Some caution that higher Street price targets have pulled forward a significant amount of anticipated upside, leaving less margin of safety if new insurance coverage or market share gains in 2026 arrive more slowly than modeled.
There is concern that expectations for biosimilar contributions starting in 2026 may prove optimistic, given limited visibility on commercial strategy, potential pricing pressure, and competitive pushback in ophthalmology markets.
Bearish analysts also highlight execution risk around scaling to $250M plus in quarterly revenue by 2027, noting that any slip in launch timing, reimbursement access, or physician adoption could drive estimate cuts and multiple compression.

What's in the News

Updated 2025 revenue guidance to a range of $270 million to $280 million, signaling a more conservative stance while keeping the original goal of over $280 million still technically achievable (Corporate guidance).
Announced the Harrow Access for All (HAFA) program to expand patient access and affordability across branded, generic, and compounded ophthalmic products, building on the earlier Vevye Access for All initiative (Product related announcement).
Outlined phased HAFA rollout beginning in Q4 2025, initially covering most specialty products including the upcoming BYQLOVI clobetasol propionate ophthalmic suspension 0.05 percent, to support early adoption through predictable, capped out of pocket costs (Product related announcement).
Planned expansion of HAFA by 2027 to span Harrow’s entire specialty, authorized generic, and compounded portfolio, with affordable cash pay or AGx options to minimize treatment interruptions for patients lacking adequate coverage (Product related announcement).
Introduced a streamlined HarrowAccess.com portal as part of HAFA, aimed at simplifying and centralizing the prescribing and fulfillment workflow for physicians and patients (Product related announcement).

Valuation Changes

The fair value estimate has risen significantly from $42.00 to $59.00 per share, reflecting higher expected earnings power.
The discount rate has increased slightly from 6.78 percent to 6.96 percent, modestly raising the implied risk profile in the model.
Revenue growth has been revised upward from 30.4 percent to 34.3 percent, indicating a more optimistic view on top line expansion.
The net profit margin has increased from 19.6 percent to 22.4 percent, signaling improved long term profitability assumptions.
The future P/E multiple has edged up from 21.2x to 21.8x, incorporating a modestly higher valuation on projected earnings.

Expansion through new branded products and acquisitions brings growth potential, but faces risks from commercial uptake, regulatory issues, and supply chain vulnerabilities.
Increasing competition and pressure on pricing threaten margin sustainability, even as operational leverage and patient access initiatives drive near-term gains.
Heavy reliance on ophthalmic products and key launches heightens exposure to regulatory, commercial, supply chain, and pricing risks that could threaten revenue growth and profitability.

Catalysts

About Harrow

An eyecare pharmaceutical company, engages in the discovery, development, and commercialization of ophthalmic pharmaceutical products.What are the underlying business or industry changes driving this perspective?

Although Harrow is benefiting from the structural demand tailwinds of an aging population and rising chronic disease prevalence, it remains heavily exposed to future healthcare pricing pressures from government and insurers focused on cost containment, which may constrain the company's ability to maintain or grow revenue and margins as its products gain broader adoption.
While the company's expansion of its branded ophthalmic pharmaceutical portfolio and recent strategic acquisitions (such as Samsung's biosimilar pipeline and BYQLOVI) significantly grow its addressable market and promise operational leverage, its financial prospects are increasingly dependent on successful growth from new product launches, which face the persistent risk of slower-than-expected commercial uptake, regulatory delays, or supply chain disruptions, directly threatening long-term earnings growth.
Even as ongoing innovations in drug delivery and strong regulatory support for compounded medications support Harrow's differentiated market position and near-term margin expansion, the competitive landscape is intensifying with both legacy pharmaceutical firms and generic or biosimilar entrants, increasing the potential for future price erosion and narrowing sustainability of gross margin improvements.
Despite broadening payer coverage and improved patient access initiatives (such as the VEVYE Access for All program and the new Apollo Care alliance) substantially improving short-term profitability and volume growth, long-term topline growth remains vulnerable to tightening reimbursement criteria and potential changes in pharmacy benefit manager formularies, which could restrain volume expansion or reverse expansionary trends.
While scaling manufacturing capabilities and national distribution networks create a clear path to higher operating leverage, the company's reliance on a relatively narrow supplier and partner base heightens the risk of persistent supply chain vulnerabilities; any disruptions could undercut optimistic revenue forecasts, compress margins, and hinder Harrow's ability to capitalize on the secular growth opportunity in ophthalmology.

Harrow Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more pessimistic perspective on Harrow compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
The bearish analysts are assuming Harrow's revenue will grow by 30.4% annually over the next 3 years.
The bearish analysts assume that profit margins will increase from -4.5% today to 19.6% in 3 years time.
The bearish analysts expect earnings to reach $98.9 million (and earnings per share of $2.56) by about September 2028, up from $-10.2 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 21.2x on those 2028 earnings, up from -136.5x today. This future PE is greater than the current PE for the US Pharmaceuticals industry at 19.4x.
Analysts expect the number of shares outstanding to grow by 3.9% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Harrow Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Harrow's heavy concentration in ophthalmic products exposes the company to outsized risks from regulatory changes or clinical setbacks in this single therapeutic area, which could directly threaten future revenue stability and overall business diversification if adverse events or new treatment paradigms emerge.
Substantial dependence on the ongoing success and scaling of new product launches such as VEVYE, IHEEZO, TRIESENCE, and BYQLOVI means that slow commercial uptake, increased competition, or reimbursement challenges in any of these could result in higher R&D and SG&A expenses while compressing net margins and potentially stalling earnings growth.
The company's growth strategy includes integration of recently acquired biosimilar products and scaling distribution through new partnerships (such as Apollo Care), introducing long-term execution risk and possible disruptions to inventory or fulfillment that could impact topline revenues if not managed effectively.
While current pricing and reimbursement conditions are favorable, the potential for increasing government and insurer pricing pressures, or tightening formularies by pharmacy benefit managers, poses a risk to Harrow's ability to grow or maintain revenues and could erode net profitability over time.
Despite reported improvements in supply chain flexibility and capacity, Harrow remains reliant on a limited network of suppliers and contract manufacturers, and any persistent or unexpected supply chain vulnerabilities could disrupt product availability, negatively impacting revenue consistency and gross margins in the long term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bearish price target for Harrow is $42.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Harrow's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $76.0, and the most bearish reporting a price target of just $42.0.
In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $504.6 million, earnings will come to $98.9 million, and it would be trading on a PE ratio of 21.2x, assuming you use a discount rate of 6.8%.
Given the current share price of $37.72, the bearish analyst price target of $42.0 is 10.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Harrow?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Rising Pricing Pressures Will Strain Ophthalmics Yet Foster Cautious Resilience