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Harrow (HROW) Surges 12%: Is This an Indication of Further Gains?

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Harrow Health (HROW - Free Report) shares rallied 12% in the last trading session to close at $9.31. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 17.2% loss over the past four weeks.

The stock scored a strong price increase driven by the optimism surrounding the company’s solid first-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Notably, the company’s key financial metrics reached record levels on both year over year and sequential basis. Management’s projection that all the pent-up demand for ophthalmic procedures (delayed due to the pandemic) is just about to get on track again, resulting in increased revenues for the company has also contributed to the price appreciation. Market is also optimistic about the acquisition of exclusive worldwide license from Spaeth/Richman Contrast Sensitivity Center (SPARCS) by Visionology -- a subsidiary of Harrow Health.

This pharmaceutical and drug compounding company is expected to post quarterly loss of $0.08 per share in its upcoming report, which represents a year-over-year change of -700%. Revenues are expected to be $15.63 million, up 93.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Harrow, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HROW going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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