October 1, 2022

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IPO Stock Of The Week: This Biotech Leader Builds New Base And Shows New Buy Point

IPO stock leader Harmony Biosciences (HRMY) is approaching a new buy point as the stock holds up in a volatile stock market. Harmony Biosciences was on the IBD IPO Leaders list Friday.




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IPO Stock To Watch: Harmony Biosciences

Plymouth Meeting, Penn.-based Harmony develops therapies for patients living with rare neurological disorders. The company’s first commercial product — Wakix — is used to treat adult patients with narcolepsy. Wakix is the first and only approved treatment for patients with narcolepsy that is not scheduled as a controlled substance, according to the company.

In the first quarter, Harmony earned an adjusted 51 cents per share on sales of $85.3 million. EPS surged 89% vs. the year-ago period, while revenue jumped 43% year over year.

IPO Stock Leader’s IBD Ratings

Despite a strong quarter, the stock has an 80 good but not great Earnings Per Share Rating out of a best-possible 99, according to IBD Stock Checkup. The company turned profitable in 2021, so it doesn’t have a long-term profit track record, which negatively impacts the EPS Rating. Weaker EPS Ratings are often normal for newer issues. Harmony debuted in August 2020.

IBD Stock Checkup also shows that HRMY stock has a solid 93 out of perfect 99 IBD Composite Rating.

Harmony is the No. 2-ranked stock in the biotech industry, behind Vertex Pharmaceuticals (VRTX). In an industry group with nearly 800 companies, that ranking truly stands out. Vertex shares triggered the 7%-8% loss-cutting rule Friday below a 276.10 buy point.


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Harmony Stock Shows New Buy Point

Following a five-week win streak, Harmony Biosciences is building a cup base that has a 54.10 buy point, according to IBD MarketSmith chart analysis. Be on the lookout for a potential handle to offer a lower entry. Shares are back above their 50-day moving average after solid gains the past week.

Bullishly, the stock’s relative strength line is nearing a new high ahead of a potential breakout.

Harmony went public in August 2020 in an initial public offering at $24 a share.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.

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IPO Stock Of The Week: This Biotech Builds New Base And Shows New Buy Point