Comparing Harrow (NASDAQ:HROW) and Rafael (NYSE:RFL)

Rafael (NYSE:RFL) and Harrow (NASDAQ:HROW) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rafael	1	0	0	0	1.00
Harrow	1	2	9	0	2.67

Harrow has a consensus target price of $66.38, indicating a potential upside of 96.14%. Given Harrow’s stronger consensus rating and higher possible upside, analysts clearly believe Harrow is more favorable than Rafael.

Earnings & Valuation

This table compares Rafael and Harrow”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rafael	$920,000.00	121.52	-$30.52 million	($0.68)	-3.16
Harrow	$272.30 million	4.66	-$5.14 million	($1.00)	-33.84

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

Volatility and Risk

Rafael has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, Harrow has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Insider and Institutional Ownership

11.3% of Rafael shares are held by institutional investors. Comparatively, 72.8% of Harrow shares are held by institutional investors. 32.9% of Rafael shares are held by company insiders. Comparatively, 12.8% of Harrow shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rafael	-3,321.74%	-41.27%	-35.32%
Harrow	-13.51%	-38.00%	-3.37%

Summary

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

About Rafael

Rafael Holdings, Inc. primarily engages in holding interests in clinical and early-stage pharmaceutical companies, and commercial real estate assets in the United States and Israel. It operates in two segments, Healthcare and Real Estate. The company engages in the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells. Its lead drug candidate is CPI-613 (devimistat), currently under Phase III clinical study for the treatment of metastatic pancreatic cancer and acute myeloid leukemia. The company is also involved in developing Promitil, a molecule designed for the targeted delivery of mitomycin-C in a proprietary prodrug form, completed Phase 1B clinical studies; Folate-targeted Promitil (Promi-Fol) which is aimed at local treatment (intravesical) of superficial bladder cancer; and Promi-Dox, a highly potent dual drug liposome with MLP and doxorubicin targeting a potential basket of tumors. In addition, it engages in the development of surgical and procedural devices, including orthopedic arthroscopy instrumentation. Rafael Holdings, Inc. was incorporated in 2017 and is headquartered in Newark, New Jersey.

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.