Harrow Q1 revenue misses analyst estimates

Overview

• U.S. ophthalmic solutions provider's Q1 revenue declined and missed analyst expectations

• Gross margin for Q1 fell to 61% from 68% a year earlier

• Company expects Q2 revenue to improve as VEVYE adjustment impact subsides

Outlook

• Company expects Q2 revenue between $71 mln and $81 mln

• Harrow Inc reaffirms full-year 2026 revenue guidance at $350 mln to $365 mln

• Company says expanded commercial coverage and improved net pricing to benefit Q2 results

Result Drivers

• VEVYE REVENUE ADJUSTMENT - Q1 revenue was reduced by a non-recurring $8 mln gross-to-net adjustment related to new commercial coverage for VEVYE, which the company says will not recur in future quarters

• STRONG PRODUCT DEMAND - VEVYE delivered record prescription growth, IHEEZO unit demand rose 18% year-over-year, and TRIESENCE unit demand more than doubled, driven by robust prescriber adoption and expanding market share

• GROSS MARGIN PRESSURE - Gross margin declined to 61% from 68% a year earlier, reflecting the impact of the VEVYE revenue adjustment and product mix

Company press release: ID:nGNX3f4zqL

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the pharmaceuticals peer group is "buy"

• Wall Street's median 12-month price target for Harrow Inc is $63.00, about 64.8% above its May 8 closing price of $38.23

• The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 28 three months ago

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