Analyzing Journey Medical (NASDAQ:DERM) and Harrow (NASDAQ:HROW)

Harrow (NASDAQ:HROW) and Journey Medical (NASDAQ:DERM) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Earnings and Valuation

This table compares Harrow and Journey Medical”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harrow	$272.30 million	5.15	-$5.14 million	($0.41)	-91.80
Journey Medical	$64.68 million	2.70	-$11.43 million	($0.37)	-17.14

Harrow has higher revenue and earnings than Journey Medical. Harrow is trading at a lower price-to-earnings ratio than Journey Medical, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Harrow and Journey Medical, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harrow	1	2	8	0	2.64
Journey Medical	1	1	2	0	2.25

Harrow currently has a consensus target price of $69.43, indicating a potential upside of 84.45%. Journey Medical has a consensus target price of $13.00, indicating a potential upside of 105.05%. Given Journey Medical’s higher possible upside, analysts plainly believe Journey Medical is more favorable than Harrow.

Profitability

This table compares Harrow and Journey Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harrow	-5.57%	19.59%	2.26%
Journey Medical	-14.82%	-35.57%	-10.88%

Insider and Institutional Ownership

72.8% of Harrow shares are held by institutional investors. Comparatively, 7.3% of Journey Medical shares are held by institutional investors. 12.8% of Harrow shares are held by insiders. Comparatively, 15.0% of Journey Medical shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Harrow has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Journey Medical has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Summary

Harrow beats Journey Medical on 9 of the 14 factors compared between the two stocks.

About Harrow

Harrow, Inc. operates as an ophthalmic-focused healthcare company. The company owns ImprimisRx, an ophthalmology outsourcing and pharmaceutical compounding business. The company was formerly known as Imprimis Pharmaceuticals, Inc. and changed its name to Harrow Health, Inc. in December 2018. Harrow Health, Inc. was incorporated in 2006 and is headquartered in Nashville, Tennessee.

About Journey Medical

Journey Medical Corporation focuses on the development and commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. The company's marketed products include Qbrexza, a medicated cloth towelette for the treatment of primary axillary hyperhidrosis; Accutane, an oral isotretinoin drug to treat severe recalcitrant nodular acne; and Amzeeq, a topical formulation of minocycline for the treatment of inflammatory lesions of non-nodular moderate to severe acne vulgaris. It also offers Zilxi, a topical minocycline treatment for inflammatory lesions of rosacea; Exelderm cream and solution an antifungal intended for topical use; Targadox, an oral doxycycline drug for adjunctive therapy for severe acne; and Luxamend, a water-based emulsion formulated to provide a moist healing environment for superficial wounds; minor cuts or scrapes; dermal ulcers; donor sites; first- and second-degree burns, including sunburns; and radiation dermatitis. In addition, the company sells sulconazole nitrate cream and solution indicated for the treatment of tinea cruris, tinea corporis, and tinea versicolor; and doxycycline hyclate tablets, as an adjunctive therapy for severe acne. The company was formerly known as Coronado Dermatology, Inc. and changed its name to Journey Medical Corporation. Journey Medical Corporation was incorporated in 2014 and is headquartered in Scottsdale, Arizona. Journey Medical Corporation is a subsidiary of Fortress Biotech, Inc.