HRMY Should I Buy
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Harmony Biosciences Holdings Inc (HRMY) is not a strong buy for a beginner, long-term investor with $50,000-$100,000 available for investment. The stock faces significant risks related to its main drug Wakix's intellectual property, which could impact future cash flows. Despite strong revenue growth, declining net income and EPS, coupled with mixed analyst ratings and technical indicators, suggest caution. Holding the stock or exploring other opportunities may be more prudent at this time.
The MACD is below 0 and negatively contracting, indicating a bearish trend. RSI is neutral at 30.838, and moving averages are converging, showing no clear direction. The stock is trading near its key support level of 27.363, with resistance levels at 31.828 and 36.292.
Revenue guidance for 2026 exceeds $1 billion, indicating strong demand for Wakix in the narcolepsy market.
Downgrades from multiple analysts and reduced price targets. Declining net income (-54.55% YoY) and EPS (-54.12% YoY) in Q4
Gross margin also dropped slightly to 71.88%.
Q4 2025 revenue increased by 21.12% YoY to $243.78 million, but net income dropped by 54.55% YoY to $22.49 million. EPS decreased by 54.12% YoY to $0.39, and gross margin declined slightly to 71.88%.
Analysts are mixed, with recent downgrades from Deutsche Bank, Truist, and UBS citing concerns over Wakix's intellectual property risks. Price targets have been lowered, with the latest targets ranging from $28 to $36. Mizuho remains optimistic with a $50 price target and an Outperform rating, but this is an outlier.
