YB new stock pitches (Thu, Sep 18)

Harrow Inc. (HROW), an eyecare pharmaceutical company, completed a transformative debt refinancing in September 2025, issuing $250 million of 8.625% senior unsecured notes due 2030 and securing a $40 million revolving credit facility to repay existing debt maturing in 2026-2027, effectively de-risking its balance sheet by extending its debt wall from 3-4 years to 2030 and reducing its weighted average cost of debt by consolidating higher-rate 11.875% bonds. The company achieved GAAP profitability in Q2 2025 with $5 million net income and 30% year-over-year revenue growth to $63.7 million, driven by flagship products VEVYE (66% sequential prescription growth to 119,526 units with industry-leading renewal rates) and IHEEZO (expected to exceed $50 million in 2025 sales), while TRIESENCE gained Transitional Pass-Through reimbursement status unlocking 40% more market access. Management reaffirmed 2025 revenue guidance exceeding $280 million and expects new revenue streams from Samsung Bioepis biosimilars and BYQLOVI commercialization rights to generate minimal incremental costs with strong operating leverage. The bull case centers on financial stability through 2030, accelerating demand for specialty products, high gross margins, and improving profitability, while bear case risks include significant debt burden, dependence on few blockbuster products, generic competition, pricing pressure, and execution risk in achieving ambitious second-half 2025 revenue targets requiring $168.5 million versus $111.5 million generated in the first half. Based on multiple valuation approaches including 6.11x biotech sector P/S ratio, DCF analysis estimating $80.27 intrinsic value, and analyst consensus of $64.67, the price target is set at $66.3 versus the current $42.8, representing 55% upside potential.

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PACCAR Inc (PCAR) is a global truck manufacturer and distributor of aftermarket parts with leading brands including Kenworth and Peterbilt, positioned as a technology leader with advanced powertrain technologies and a favorable manufacturing footprint. The company operates a diversified business model with exposure to high-margin aftermarket parts, and demand is expected to benefit from increased infrastructure spending. While uncertainties and tariffs create a more muted short-term growth outlook, management anticipates margins will gradually improve as price versus cost dynamics re-balance. PCAR maintains a competitive advantage with inventory levels at 3 months, which is below both historical averages and industry peers, positioning the company well for an industry upturn. The stock trades at an attractive valuation of 14x 2026 EPS and 2.7x book value while offering a 3.8% dividend yield. - link

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Aeluma (ALMU), a photonics company developing heterogeneous integration technology that scales InGaAs onto silicon wafers up to 12 inches in diameter, has accelerated its commercial pivot with 20 active customer engagements across defense/aerospace (6-7), AI infrastructure (6-7), mobile/consumer (6-7), and automotive/robotics/quantum sectors, plus four foundry partnerships (versus the expected two additional) with two more in discussion. The company's technology, validated by over $15 million in government contracts from DARPA, NASA, the U.S. Navy, and Department of Energy, enables 10x cost reduction for compound semiconductors and targets applications in sensing, communications, and quantum tech within a $4.9 billion serviceable addressable market by 2030. Despite beating FY2025 revenue guidance with $4.7 million versus $4.4-4.6 million expected and maintaining $15.7 million cash with no debt, the stock dropped 43% from mid-July highs following conservative FY2026 guidance of $4-6 million, a $100 million shelf registration filing, and CEO insider sales of 150,000 shares under a 10b5-1 plan. Craig-Hallum maintains a Buy rating with $20 price target while Benchmark holds Buy with $25 price target, both citing strong commercial engagement and validation of the company's technological moat with 30+ patents. Key risks include the early-stage nature of the business, 6-36 month customer qualification timelines, potential volatility in the micro-cap space, and execution challenges in scaling fabs and navigating supply chains, though the downside is buffered by government contract validation and strong cash position while the upside presents multi-bagger potential as commercialization accelerates.

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