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

We came across a bullish thesis on Harmony Biosciences Holdings, Inc. on In. Specter’s Substack. In this article, we will summarize the bulls’ thesis on HRMY. Harmony Biosciences Holdings, Inc.’s share was trading at $34.40 as of August 1st. HRMY’s trailing and forward P/E were 13.13 and 9.29, respectively, according to Yahoo Finance.

Is Harmony Biosciences Holdings, Inc. (HRMY) the Best Small-Cap Growth Stock to Buy Now?

A close-up of a pharmaceutical drug bottle, showcasing the potential of the company’s innovative therapies.

Harmony Biosciences Holdings, Inc. (HRMY) is a commercial-stage biopharmaceutical company focused on innovative treatments for rare neurological diseases. Its flagship product, WAKIX®, a first-in-class histamine H3 receptor antagonist for excessive daytime sleepiness and cataplexy in adult narcolepsy patients, drives the company’s strong financial performance. In 2024, Harmony generated $714.7M in revenue with a 30% EBITDA margin, supported by WAKIX serving approximately 7,300 patients in a U.S. narcolepsy market of 170,000. The company is targeting $1B+ in narcolepsy revenue by 2030 through continued patient growth, label expansions such as pediatric narcolepsy, and next-generation formulations in development.

Beyond WAKIX, Harmony is diversifying with an advanced pipeline addressing significant unmet needs in rare neurological disorders. Key programs include pitolisant for Prader-Willi Syndrome (Phase 3), Myotonic Dystrophy (Phase 2), and idiopathic hypersomnia (Phase 3 expected in late 2025); ZYN002, a cannabidiol gel for Fragile X Syndrome (Phase 3 data due Q3 2025) and 22q Deletion Syndrome; and additional assets like BP1.15205 (orexin-2 receptor agonist) and HBS-102 (MCHR1 antagonist). The company expects up to six Phase 3 trials by the end of 2025, reflecting a robust late-stage pipeline.

Harmony maintains financial discipline with over $600M in cash and investments, ongoing GAAP profitability for four years, and a share repurchase program. Its EV/EBITDA multiple of 4.8x NTM and strong free cash flow profile suggest meaningful undervaluation versus peers. With a leadership position in narcolepsy, a diversified pipeline targeting multi-billion-dollar opportunities, and strategic flexibility supported by a strong balance sheet, Harmony offers a compelling risk/reward for investors.

Previously, we covered a bullish thesis on Harmony Biosciences Holdings, Inc. by Long-Access-2143 in April 2025, which highlighted WAKIX’s strength, robust financials, and undervaluation supported by pipeline catalysts. The stock has appreciated about 11% since then as revenue growth and margins held strong. The thesis still stands. In. Specter shares a similar view but emphasizes balance sheet strength and strategic flexibility.

Harmony Biosciences Holdings, Inc. 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 doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HRMY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.