Critical Comparison: Rafael (NYSE:RFL) and Harrow (NASDAQ:HROW)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Harrow and Rafael, as reported by MarketBeat.com.

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

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

Profitability

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

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

Risk and Volatility

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

Valuation & Earnings

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

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

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.

Institutional & Insider Ownership

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

Summary

Harrow beats Rafael 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 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.