Value
8.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 7.6 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 10.6x
- ▸PEG: 0.03
- ▸Attractively valued
HROW · Why this verdict
Why Harrow (HROW) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Harrow has a large gap to its $54.81 analyst target and a cheap forward multiple, but it missed earnings in 3 of the last 4 quarters, is cash-burning with below-floor quality, and trades in a confirmed downtrend with 23% short interest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The $28.44 price sits well below the $54.81 analyst target, implying 92.7% upside against a 10.1% modeled downside. Targets | Price should close part of the gap to the analyst target as earnings recover over 12 months. | →Stable |
| CounterCoverage is light and the target is nearly double the price, so it may be stale after the 48% drawdown from the high. | ||
Harrow is valued at a forward P/E of 10.3x with a PEG of 0.03, flagged as attractively valued. Valuation breakdown | Forward P/E should stay below roughly 15x as earnings recover. | →Stable |
| CounterThe cheap forward multiple depends on a swing from recent losses to profit that the last three misses do not yet support. | ||
Harrow missed EPS estimates in 3 of the last 4 quarters, with an average surprise of -61.5% and a latest actual of -$0.46 against -$0.24. Earnings | EPS should come in at or above consensus in the next 2 reports, starting November 2026. | ↑Improving |
| CounterMisses are widening in size (-91.7% and -124.2% in the last two), which points to deteriorating execution. | ||
Quality scores 3.3/10, below the 4.0 minimum, with free cash flow at -2% of revenue and a Rule of 40 score of 9, which is a fail. Quality breakdown | Free cash flow should turn positive and Rule of 40 should exceed 20 over 12 months. | →Stable |
| CounterA specialty pharma company with zero margin credit may have to keep spending on launches, delaying the turn to positive cash flow. | ||
Price is below the 200-day average with a moving-average slope of -5.9% over 30 days, and short interest is 23%. Momentum breakdown | Price should reclaim the 200-day moving average as rising on-balance volume signals accumulation. | ↑Improving |
| CounterA confirmed downtrend with 23% of shares sold short signals that informed investors expect further weakness. | ||
The $28.44 price sits well below the $54.81 analyst target, implying 92.7% upside against a 10.1% modeled downside.
→StableTargets
- Expectation
- Price should close part of the gap to the analyst target as earnings recover over 12 months.
CounterCoverage is light and the target is nearly double the price, so it may be stale after the 48% drawdown from the high.
Harrow is valued at a forward P/E of 10.3x with a PEG of 0.03, flagged as attractively valued.
→StableValuation breakdown
- Expectation
- Forward P/E should stay below roughly 15x as earnings recover.
CounterThe cheap forward multiple depends on a swing from recent losses to profit that the last three misses do not yet support.
Harrow missed EPS estimates in 3 of the last 4 quarters, with an average surprise of -61.5% and a latest actual of -$0.46 against -$0.24.
↑ImprovingEarnings
- Expectation
- EPS should come in at or above consensus in the next 2 reports, starting November 2026.
CounterMisses are widening in size (-91.7% and -124.2% in the last two), which points to deteriorating execution.
Quality scores 3.3/10, below the 4.0 minimum, with free cash flow at -2% of revenue and a Rule of 40 score of 9, which is a fail.
→StableQuality breakdown
- Expectation
- Free cash flow should turn positive and Rule of 40 should exceed 20 over 12 months.
CounterA specialty pharma company with zero margin credit may have to keep spending on launches, delaying the turn to positive cash flow.
Price is below the 200-day average with a moving-average slope of -5.9% over 30 days, and short interest is 23%.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day moving average as rising on-balance volume signals accumulation.
CounterA confirmed downtrend with 23% of shares sold short signals that informed investors expect further weakness.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 7.7 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -2% of revenue
- ▸Rule of 40: 9 (fail)
Growth
5.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.2 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.4%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 114%
Insider
6.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 9.8 |
| notable moves | 5.0 |
- ▸Modest insider selling — $450,000 (0.041% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 1.0 |
| growth rank | 5.1 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 4.6 |
| 52w position | 0.7 |
Risk (lower is worse)
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.3 |
| days to cover | 0.0 |
| volatility | 0.3 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 0.0 |
- ▸High short interest justified: 22%
- ▸High IV: 95%
Catalyst
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/3M
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:5.7>=5.5
- ASYMMETRY:8.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.7>=5.0 recovering
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
8.88
Upside
+86.5%
Downside
9.7%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 43
EdgeInst Constrain — Small cap ($1.1B) below institutional reach
SuitabilitySpeculative — Drawdown -46% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Value at 8.7 and asymmetric R:R of 8.88.
The strongest dimensions are Value at 8.7, Sentiment at 6.7, and Insider at 6.4; the weakest are Peer rank at 2.2, Catalyst at 3.0, and Risk (lower is worse) at 3.1. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 8.88 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Large Gap To Analyst Target
Trip ifAnalyst target is cut below $40.00 from the current $54.81.
- P2Cheap Forward Valuation
Trip ifForward P/E rises above 20x as earnings estimates are cut.
- P3Repeated Earnings Misses
Trip ifEPS misses estimates in at least 2 of the next 3 quarters.
- P4Weak Cash Generation Quality
Trip ifFree cash flow stays below -2% of revenue for 4 consecutive quarters.
- P5Confirmed Downtrend High Short Interest
Trip ifPrice falls below the $26.45 stop level from the current $28.44.