Harmony Biosciences(HRMY) ZACKS·2025-02-24 18:05Core Viewpoint - Harmony Biosciences Holdings, Inc. (HRMY) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Stock Price Impact - The Zacks rating system is primarily based on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [5]. - Rising earnings estimates and the subsequent rating upgrade for Harmony Biosciences indicate an improvement in the company's underlying business, suggesting potential upward pressure on the stock price [6]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The system maintains a balanced distribution of 'buy' and 'sell' ratings across over 4000 stocks, ensuring that only the top 5% receive a 'Strong Buy' rating [10]. Recent Earnings Estimate Revisions - For the fiscal year ending December 2024, Harmony Biosciences is expected to earn $2.41 per share, reflecting a 13.2% increase from the previous year [9]. - Over the past three months, the Zacks Consensus Estimate for Harmony Biosciences has increased by 21.1%, indicating positive sentiment among analysts [9]. Conclusion - The upgrade to Zacks Rank 1 positions Harmony Biosciences in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [11].