HARMONY BIOSCIENCES HOLDINGS (NASDAQ:HRMY) is not too expensive for the growth it is showing.

Discover HARMONY BIOSCIENCES HOLDINGS (NASDAQ:HRMY), an undervalued growth gem identified by our stock screener. HRMY is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Evaluating Growth: HRMY

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of HRMY, the assigned 9 reflects its growth potential:

• The Earnings Per Share has been growing by 44.61% on average over the past years. This is a very strong growth
• The Revenue has grown by 22.80% in the past year. This is a very strong growth!
• The Revenue has been growing by 160.13% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, HRMY will show a very strong growth in Earnings Per Share. The EPS will grow by 36.90% on average per year.
• HRMY is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.10% yearly.

How do we evaluate the Valuation for HRMY?

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. HRMY was assigned a score of 9 for valuation:

• With a Price/Earnings ratio of 11.51, the valuation of HRMY can be described as very reasonable.
• Based on the Price/Earnings ratio, HRMY is valued cheaply inside the industry as 89.39% of the companies are valued more expensively.
• HRMY is valuated cheaply when we compare the Price/Earnings ratio to 28.64, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 9.20, the valuation of HRMY can be described as reasonable.
• Based on the Price/Forward Earnings ratio, HRMY is valued cheaper than 88.89% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 21.44. HRMY is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HRMY indicates a rather cheap valuation: HRMY is cheaper than 92.93% of the companies listed in the same industry.
• HRMY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HRMY is cheaper than 92.42% of the companies in the same industry.
• HRMY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of HRMY may justify a higher PE ratio.
• A more expensive valuation may be justified as HRMY's earnings are expected to grow with 31.63% in the coming years.

Health Examination for HRMY

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. HRMY scores a 8 out of 10:

• HRMY has an Altman-Z score of 4.82. This indicates that HRMY is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 4.82, HRMY belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
• The Debt to FCF ratio of HRMY is 0.82, which is an excellent value as it means it would take HRMY, only 0.82 years of fcf income to pay off all of its debts.
• HRMY's Debt to FCF ratio of 0.82 is amongst the best of the industry. HRMY outperforms 95.45% of its industry peers.
• A Debt/Equity ratio of 0.25 indicates that HRMY is not too dependend on debt financing.
• HRMY has a Current Ratio of 3.31. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.
• HRMY has a Quick Ratio of 3.27. This indicates that HRMY is financially healthy and has no problem in meeting its short term obligations.

Profitability Examination for HRMY

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of HRMY, the assigned 8 is noteworthy for profitability:

• The Return On Assets of HRMY (14.56%) is better than 96.46% of its industry peers.
• The Return On Equity of HRMY (22.07%) is better than 94.95% of its industry peers.
• HRMY has a Return On Invested Capital of 18.94%. This is amongst the best in the industry. HRMY outperforms 93.94% of its industry peers.
• The last Return On Invested Capital (18.94%) for HRMY is above the 3 year average (18.27%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 20.36%, HRMY belongs to the best of the industry, outperforming 93.43% of the companies in the same industry.
• HRMY's Profit Margin has improved in the last couple of years.
• The Operating Margin of HRMY (29.09%) is better than 93.94% of its industry peers.
• The Gross Margin of HRMY (78.06%) is better than 83.84% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Our latest full fundamental report of HRMY contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.