With Record Sales This Pharma Stock is Eyeing International Expansion

30‑Second Take

Why now? TARS sits at an inflection point, balancing strong fundamentals with favorable market conditions.

The company is positioned in a sector with rising demand, and recent developments have strengthened its growth trajectory, as evidenced by record quarterly net product sales just two years after the launch of its XDEMVY^® product. 

TARS has gained 101.8% over the last year, but its valuations are still attractive compared to peers, giving investors a favorable standing before wider recognition drives prices higher.

TARS stands to benefit from both short-term catalysts and long-term structural growth, making this a timely moment to invest.

Trade Setup

Time frame: Swing to medium-term
Edge type: Momentum breakout

Snapshot Table

Chart

1-Month Synopsis: TARS has gained 33.59% in the last month, with trading between mid-July and mid-August only coming alive with the earnings release on August 06.

Before that period, trading was broadly flat, but after the promising Q2 data, stock prices soared from ~$42.37 to a high of $54.37.

The stock is currently trading at the top end of the 52-week range, with technical signals indicating the upward trajectory will propel TARS past the 52-week high in no time.

Bull Case 

Core thesis: Tarsus is a biotech company focused on addressing several diseases with high unmet need, most notably in eye care, dermatology, and infectious disease prevention.

It has one product with FDA approval, XDEMVY^®, which treats the highly prevalent yet widely undiagnosed eye disease, blepharitis, and two additional products in stage two trials focused on ocular rosacea and Lyme disease.

Catalysts: Q2 2025 was TARS' strongest quarter since its founding in 2017, with a record $100 million in net sales.

Product sales totaled $181.0 million compared to $65.5 million in the same quarter of 2024.

Its flagship drug, XDEMVY, has seen a 152%-year sales increase, establishing it as the treatment of choice for Demodex blepharitis. 

TARS is also growing its sales pipeline, with a successful direct-to-consumer advertising campaign driving significant prescription growth. 

In addition to these new channels, the company has additional treatments in clinical trials and is making progress with international expansion.

It will meet with officials in Japan later this year to discuss regulatory approval and is already pursuing EU regulatory approval for a preservative-free formulation of XDEMVY eye drops. 

The company is well-positioned to capitalize on growing demand in its sector, but remains attractively priced compared to competitors.

Valuation upside: Analyst price targets span a wide range, running from a low of $45.00 to a high of $92.00. The average is $73.88. 

Technical tailwind: Technically, TARS is riding a powerful uptrend. Every major moving average signals 'buy,' momentum indicators like RSI and MACD confirm strength, and all timeframes are aligned bullishly.

That means investors aren't just betting on fundamentals; they've got the market's momentum at their back, too.

Bear Case 

Key risk: The key bear case risk for TARS lies in its ability to successfully commercialize its treatments at scale.

While clinical results and regulatory approvals provide a foundation for growth, the company still depends heavily on a narrow product base with just one FDA-approved treatment in its pipeline to date.

This leaves it exposed if XDEMVY sales momentum slows. 

Pricing pressures from insurers and competition could also weigh on margins, and with high research and development spend continuing to consume cash (research spend was $30.0 million in Q2 2025 compared to $24.4 million for the same period in 2024), any shortfall in revenue may force further equity raises. 

In such a scenario, dilution, slower growth, and increased investor skepticism could undermine the current valuation, making execution risk the most significant challenge for TARS moving forward.

Macro/sector headwinds: Political instability, FDA restructuring, and threats of tariffs on pharmaceutical imports are currently weighing heavily on the broader sector.

They aren't just operational headaches; they also represent additional expense and uncertainty, which is unsettling for investors.

It's no coincidence that pharma and biotech aren’t performing as strongly as they should in this environment.

Competitive threat: Tarsus Pharmaceuticals faces an increasingly crowded and potent competitive environment.

Not only do global pharmaceutical giants such as Pfizer, Johnson & Johnson, and Merck wield vast resources for aggressive R&D and marketing, but the rise of biologics, gene therapies, and biosimilars also threatens to eclipse traditional therapeutic approaches.

Tarsus must also contend with established ophthalmic therapies such as Restasis, which already commands a strong market position and entrenched prescribing habits.

Crowded-trade concern: Strong recent momentum and a bullish consensus could ironically be setting the foundation for a crowded trade.

If everyone is already long, there may be few buyers left to push the stock higher, but plenty of sellers if sentiment turns.

Quick Checklist 

✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (August 20, 2025)

Deep‑Dive Links

• Q2 2025 Earnings Report 

• Analyst Ratings and Price Targets

• Short Interest Data  

• Company Profile and Investor Relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha