Harmony Biosciences Holdings, Inc. (NASDAQ: HRMY)

Sector: Healthcare Industry: Biotechnology CIK: 0001802665
Market Cap 2.14 Bn
P/B 2.57
P/E 11.54
P/S 2.59
ROIC (Qtr) 17.45
Div Yield % 0.00
Rev 1y % (Qtr) 28.71
Total Debt (Qtr) 168.51 Mn
Debt/Equity (Qtr) 0.20

About

Harmony Biosciences Holdings, Inc., a company that trades under the symbol HRMY on the NASDAQ, operates within the pharmaceutical industry. The company is dedicated to developing and commercializing innovative therapies for patients afflicted with rare neurological diseases. Harmony Biosciences' primary business activity revolves around the development and commercialization of innovative therapies for rare neurological diseases. The company's operations are concentrated in the United States, where it has established a significant presence in the...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 297.61M provides robust 1.77x coverage of total debt 168.51M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 647M provide 32.35x coverage of short-term debt 20M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 297.61M provides exceptional 19.44x coverage of interest expenses 15.31M, showing strong debt service capability.
  • Robust free cash flow of 296.89M exceeds capital expenditure of 716000 by 414.66x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 1.11B provides 6.60x coverage of total debt 168.51M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 297.61M barely covers its investment activities of (29.20M), with a coverage ratio of -10.19, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (29.20M) provide weak support for R&D spending of 174.33M, which is -0.17x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 647M provide limited coverage of acquisition spending of (15M), which is -43.13x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 100.65M relative to inventory of 6.88M (14.63 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Long-term investments of 105.83M represent a high 73.49x of fixed assets 1.44M, indicating potential overexposure to financial assets versus operational capabilities.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,151.25 Bn -1,249.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 485.22 Bn 7,078.40 97.58 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.74 Bn 33.40 10.47 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 82.16 Bn 18.24 5.73 2.71 Bn
5 ARGX Argenx Se 48.85 Bn 32.43 25,472.44 -
6 ALNY Alnylam Pharmaceuticals, Inc. 46.12 Bn 1,058.58 14.37 3.21 Bn
7 BNTC Benitec Biopharma Inc. 42.24 Bn -1,010.00 0.00 0.00 Bn
8 INSM INSMED Inc 28.75 Bn -24.29 64.32 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.46 11.11
EV to Cash from Ops. EV/CFO 5.94 26.32
EV to Debt EV to Debt 10.50 688.48
EV to EBIT EV/EBIT 7.20 -10.97
EV to EBITDA EV/EBITDA 7.09 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF 5.96 25.03
EV to Market Cap EV to Market Cap 0.83 163.46
EV to Revenue EV/Rev 2.14 148.57
Price to Book Value [P/B] P/B 2.57 20.73
Price to Earnings [P/E] P/E 11.54 -0.34
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -12.47
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.14
Interest Coverage Int. cover (Qtr) 16.05 860.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.15 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 67.02 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 46.38 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 25.03 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) 27.07 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) 31.44 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) 50.23 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) 34.84 -33.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 19.66 264.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 2.90 3.81
Current Ratio Curr Ratio (Qtr) 3.76 7.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 0.43
Interest Cover Ratio Int Coverage (Qtr) 16.05 860.86
Times Interest Earned Times Interest Earned (Qtr) 16.05 860.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.60 -17,746.13
EBIT Margin % EBIT Margin % (Qtr) 29.76 -18,101.92
EBT Margin % EBT Margin % (Qtr) 27.90 -18,961.86
Gross Margin % Gross Margin % (Qtr) 77.70 -9.24
Net Profit Margin % Net Margin % (Qtr) 22.50 -18,911.61