Is Harmony Biosciences Holdings, Inc. overvalued or undervalued?

As of 5 August 2025, the valuation grade for Harmony Biosciences Holdings, Inc. has moved from attractive to very attractive, indicating a strong improvement in its valuation outlook. The company appears to be undervalued, with a P/E ratio of 13, significantly lower than the peer average of 11.40 for similar companies. Additionally, the EV to EBITDA ratio stands at 7.96, which is also favorable compared to peers like Prestige Consumer Healthcare, Inc. with an EV to EBITDA of 11.55. The PEG ratio of 3.11 suggests that the stock may be undervalued relative to its growth prospects.
In comparison to its peers, Harmony Biosciences shows a robust ROCE of 46.44% and ROE of 21.20%, further supporting its valuation stance. However, the company's stock has underperformed against the S&P 500 over multiple periods, with a one-year return of -14.89% compared to the S&P 500's 17.14%, indicating a need for caution despite the attractive valuation metrics.