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Surging Earnings Estimates Signal Upside for Harmony Biosciences (HRMY) Stock

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Harmony Biosciences Holdings, Inc. (HRMY - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Harmony Biosciences, as there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.60 per share, which is a change of -4.76% from the year-ago reported number.

The Zacks Consensus Estimate for Harmony Biosciences has increased 5.26% over the last 30 days, as one estimate has gone higher while one has gone lower.

Current-Year Estimate Revisions

The company is expected to earn $2.19 per share for the full year, which represents a change of +2.82% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for Harmony Biosciences versus one negative revision. This has pushed the consensus estimate 8.6% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Harmony Biosciences currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Harmony Biosciences shares have added 7.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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