Harrow, Inc. (HROW) and the Implications of Its Rising Relative Strength Rating: A Sustainable Turnaround in the Ophthalmic Sector?

The stock market is a theater of momentum, where technical indicators often serve as the first act in a broader narrative of value creation. Harrow, Inc. (HROW) has recently taken center stage, with its Relative Strength (RS) Rating surging from 64 to 79 in a matter of days, and briefly climbing into the 80-plus percentile. This sharp upward trajectory raises a critical question: Is this a fleeting spike, or does it signal a sustainable turnaround for a company poised to capitalize on the booming ophthalmic pharmaceutical sector?

The Technical Case for Optimism

HROW's RS Rating, a 52-week performance benchmark against its peers, has crossed into “Very Strong” territory, as defined by AAII's Momentum Grade. This metric, calculated by Investors' Business Daily (IBD), reflects not just price action but the broader market's confidence in a stock's ability to outperform. The jump from 64 to 79—a 22-point leap—suggests that HROW has not only caught up to its peers but is now outpacing them.

Technical indicators reinforce this narrative. The stock's 50-day and 200-day moving averages are nearly aligned at $32.41 and $32.50, respectively, indicating a stable price trend. The Relative Strength Index (RSI) of 64.74 suggests the stock is nearing overbought territory, a classic sign of short-term momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) of 0.25, compared to a signal line of 0.51, hints at a bullish trend. These signals, while not guarantees of future performance, suggest that HROW's price action has captured the attention of both retail and institutional investors.

Fundamentals: A Strategic Reinvention

HROW's technical strength is not occurring in a vacuum. The company has undergone a strategic transformation, shifting from a compounding pharmacy business to a diversified ophthalmic pharmaceutical leader. Key acquisitions—such as VEVYE (a water-free dry eye treatment), IHEEZO (an ocular anesthetic), and TRIESENCE (a corticosteroid injection)—have expanded its portfolio into both anterior and posterior segments of eye care.

The “VEVYE Access For All” program, which ensures patient access for as little as $0 per bottle, has been a game-changer. Despite a Q2 2025 revenue dip for VEVYE, prescription volume surged by 66% and 62% for total and new prescriptions, respectively. This underscores a critical insight: affordability and accessibility can drive market share even in the face of short-term revenue volatility.

Moreover, HROW's recent acquisition of Samsung Bioepis' ophthalmology biosimilars—BYOOVIZ and OPUVIZ—positions it in the lucrative anti-VEGF market, a $62 billion sector by 2030. These biosimilars target conditions like wet age-related macular degeneration, a growing concern as global populations age.

Sector Tailwinds: A $62 Billion Opportunity

The ophthalmic pharmaceutical sector is experiencing a perfect storm of growth drivers. By 2030, the global market is projected to reach $62.08 billion, growing at a 8.5% CAGR, driven by rising prevalence of eye diseases, aging demographics, and advancements in drug delivery systems. North America, which accounts for 42.7% of the global market, is a key battleground, with the U.S. leading in innovation and adoption.

HROW's focus on both branded and compounded products allows it to navigate this landscape effectively. Its ImprimisRx compounding business, for instance, provides a stable revenue stream, while its branded portfolio—anchored by VEVYE and IHEEZO—targets high-growth niches. The company's 46% stake in Melt Pharmaceuticals, which is developing a non-opioid sedation therapy (MELT-300), further diversifies its pipeline.

Risks and Cautionary Notes

While the case for HROW is compelling, investors must remain vigilant. The company's current earnings are negative, with a trailing P/E ratio that is not available due to losses. Its free cash flow remains negative, and it has yet to pay dividends—a red flag for income-focused investors. Additionally, the RSI nearing overbought levels (64.74) suggests that a pullback could be imminent if the stock fails to deliver on its fundamentals.

The ophthalmic sector is also highly competitive, with giants like Alcon and Novartis dominating the landscape. HROW's success will depend on its ability to execute its market access programs, maintain pricing power, and scale its biosimilar portfolio.

Investment Implications

For investors, HROW presents a high-conviction opportunity in a sector with structural growth. The RS Rating upgrade reflects a confluence of technical strength and strategic execution, but sustainability will depend on the company's ability to convert short-term momentum into long-term value.

• Short-Term Play: The stock's current momentum, supported by strong analyst ratings (8 “Buys” with a $63.83 average target), makes it a candidate for aggressive investors willing to ride the wave. However, the RSI near overbought levels suggests a potential correction if earnings or guidance fall short.
• Long-Term Play: HROW's pipeline, including BYQLOVI (a high-potency steroid for post-surgery care) and MELT-300, offers a compelling long-term story. Investors with a 3–5 year horizon may find value in its strategic positioning in the anti-VEGF and dry eye markets.

Conclusion

Harrow, Inc. (HROW) is at an inflection point. Its rising RS Rating is not just a technical anomaly but a reflection of a company that has repositioned itself at the intersection of innovation and affordability in ophthalmic care. While risks remain—particularly around profitability and competition—the sector's tailwinds and HROW's strategic agility suggest that this momentum could be the start of a sustainable turnaround. For investors, the key will be to balance optimism with caution, ensuring that the stock's technical strength is matched by its ability to deliver on its transformative vision.

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