HARROW, INC. (HROW) Stock Analysis
HARROW, INC. (HROW) Stock Analysis
Overall Grade: F (Concerning)
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HARROW, INC. faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -8.2% | Below expectations |
| FCF Margin | 7.2% | Healthy cash flow |
| Debt/Equity | 5.2x | Elevated debt |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is HARROW, INC.'s Profitability and ROIC?
HARROW, INC.'s return on invested capital of -8.2% is below the typical cost of capital. Gross margin of 81.1% with operating margin at 12.1% reflects the company's strong market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -8.2% | Red flag | Below cost of capital |
| Return on Equity (ROE) | -8.7% | Red flag | Moderate equity returns |
| Gross Margin | 81.1% | Excellent | Strong pricing power |
| Operating Margin | 12.1% | Good | Moderate operational efficiency |
How Strong is HARROW, INC.'s Cash Flow Quality?
HARROW, INC. generated $16.6M in free cash flow over the trailing twelve months, representing a 7.2% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 7.2% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $16.6M | Good | Positive cash generation |
| OCF/Net Income | -3.5x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is HARROW, INC.'s Financial Health?
HARROW, INC.'s debt-to-equity ratio of 5.2x indicates elevated leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 5.2x | Red flag | Elevated leverage |
| Net Cash Position | $-168.6M | Adequate | Net debt position |
Is HARROW, INC. Stock Overvalued or Undervalued?
HARROW, INC. trades at a P/E of -344.1x, representing a premium to the sector median of N/A. Free cash flow yield of 0.9% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -344.1x | Red flag | Reasonable valuation |
| EV/Sales | 5.8x | Adequate | Growth premium priced in |
| FCF Yield | 0.9% | Warning | Lower cash yield |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -8.2% | Bottom 50% | - |
| Free Cash Flow Margin | 7.2% | Top 50% | - |
| Gross Margin | 81.1% | Top 25% | 1.3x above |
| Operating Margin | 12.1% | Top 50% | 2.7x above |
| Return on Equity (ROE) | -8.7% | Top 50% | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -8.2% (Red flag - Bottom 50% of sector (median: 0.0%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 7.2% (Adequate - Top 50% of sector (median: 0.0%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 81.1% (Excellent - Top 25% of sector (median: 61.4%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 516.6% (Red flag)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 0.9% (Red flag)
Frequently Asked Questions
Q: What is HARROW, INC.'s Return on Invested Capital (ROIC)?
HARROW, INC. (HROW) has a trailing twelve-month Return on Invested Capital (ROIC) of -8.2%. This compares below the sector median of 0.0%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is HARROW, INC.'s Free Cash Flow Margin?
HARROW, INC. (HROW) has a free cash flow margin of 7.2%, generating $16.6 million in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is HARROW, INC. stock overvalued or undervalued?
HARROW, INC. (HROW) trades at a P/E ratio of -344.1x, which is above the sector median of N/A. The EV/Sales multiple is 5.8x. Free cash flow yield is 0.9%, reflecting growth expectations priced into the stock.
Q: How much debt does HARROW, INC. have?
HARROW, INC. (HROW) has a debt-to-equity ratio of 5.2x with total debt of $242.9 million. Net debt position is $168.6 million.
Q: What is HARROW, INC.'s revenue and earnings growth?
HARROW, INC. (HROW) grew revenue by 54.9% year-over-year. Earnings per share increased by 84.2% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does HARROW, INC. compare to competitors in Healthcare?
Compared to other companies in Healthcare, HARROW, INC. (HROW) shows: ROIC of -8.2% is below the sector median of 0.0% (Bottom 41%). FCF margin of 7.2% exceeds the sector median of 0.0% (Top 27% of sector). Gross margin at 81.1% is 19.7 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Healthcare companies with available SEC filings.
Q: What warning signs should I watch for with HARROW, INC.?
Investors in HARROW, INC. (HROW) should monitor these potential warning signs: 1) Debt-to-equity of 5.2x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-10. TTM metrics as of Q3 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.