Harmony Biosciences Holdings, Inc. (HRMY): A Bull Case Theory

We came across a bullish thesis on Harmony Biosciences Holdings, Inc. (HRMY) on Capital Curiosity’s Substack by Taylor Nichols. In this article, we will summarize the bulls’ thesis on HRMY. Harmony Biosciences Holdings, Inc. (HRMY)’s share was trading at $35.03 as of 5^th June. HRMY’s trailing and forward P/E were 13.37 and 9.45 respectively according to Yahoo Finance.

Harmony Biosciences stands out as an overlooked gem in the small-cap biotech space, combining strong financials with pipeline potential in a niche therapeutic area. With a $2 billion market cap and a focus on rare neurological diseases, Harmony’s flagship drug WAKIX for narcolepsy has underpinned impressive fundamentals—35% revenue CAGR since 2020, 25% net margins, and consistent free cash flow conversion above 30%. Despite these metrics, the stock trades at just 13x earnings and an EV/EBITDA of 7.9x, reflecting investor scepticism largely tied to single-product dependency and unresolved legal risks from 2023 fraud allegations.

Still, Harmony boasts over $480 million in cash, negligible debt, and a stable share count, which enhances confidence in long-term shareholder returns. While WAKIX remains the core revenue driver, the company is aggressively diversifying through M&A, including the Zynerba and Epygenix acquisitions, bringing promising assets like ZYN002 for Fragile X Syndrome into the pipeline.

Phase 3 data expected in Q3 2025 could catalyze upside, alongside the development of Pitolisant HD and other preclinical candidates. A DCF valuation incorporating conservative assumptions yields share prices between $38 and $62, implying a substantial upside from current levels.

Analyst sentiment is bullish, with eight of nine recent ratings being buys and a $51 average price target. Although risks like competition from Jazz Pharmaceuticals, FDA hurdles, and prolonged legal overhang remain, Harmony’s profitability, cash strength, and strategic execution offer investors a compelling asymmetrical opportunity. For those seeking exposure to a profitable, underappreciated rare disease player with both pipeline and financial momentum, Harmony merits close attention.

Previously, we covered a bullish thesis on Harmony Biosciences by Long-Access-2143 in April 2025, which aligns with Taylor Nichols’ analysis. The stock has seen an appreciation of approximately 13% since then. Both highlight WAKIX’s strength and undervaluation, while Long-Access-2143 stresses the mispricing post short-seller attack and details a WAKIX-driven DCF, Nichols places more emphasis on pipeline expansion and cash strength. Together, they reinforce Harmony’s appeal as a profitable, underappreciated biotech.

Harmony Biosciences Holdings, Inc. (HRMY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held HRMY at the end of the first quarter which was 26 in the previous quarter. While we acknowledge the risk and potential of HRMY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.