Neuronetics (NASDAQ:STIM) Releases Quarterly Earnings Results, Beats Expectations By $0.07 EPS

Key Points

• Neuronetics beat quarterly expectations, reporting a loss of $0.02 per share versus the forecast loss of $0.09, and revenue of $41.96 million versus $40.42 million expected.
• Revenue grew 12.5% to about $42 million, gross margin expanded to 52.2%, and the company reported positive operating income, adjusted EBITDA, and operating and investing cash flow for the quarter.
• Full-year guidance was unchanged at $160 million to $164 million in revenue, while management still expects operating and investing cash flow to be negative $10 million to $12 million.

Neuronetics (NASDAQ:STIM - Get Free Report) released its quarterly earnings data on Wednesday. The company reported ($0.02) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.09) by $0.07, FiscalAI reports. The business had revenue of $41.96 million for the quarter, compared to analysts' expectations of $40.42 million. Neuronetics had a negative return on equity of 125.11% and a negative net margin of 19.62%.

Here are the key takeaways from Neuronetics' conference call:

• Revenue rose 12.5% to $42 million, while gross margin expanded to 52.2%; the company also reported positive operating income, adjusted EBITDA, and operating and investing cash flow for the quarter.
• Greenbrook revenue increased 20.1%, supported by revenue-cycle improvements and growth in SPRAVATO. Management said early results from its AI-enabled claims tool improved first-month collections by a low double-digit percentage, though clinic occupancy remains uneven, ranging from about 25% to 75%.
• NeuroStar recorded its strongest quarter for system sales, with more than half of units sold through capital or lease arrangements. Management said the broader go-to-market strategy is reaching larger accounts, but expects sessions revenue to continue trending slightly lower.
• Despite positive quarterly cash flow, the company still expects full-year cash flow from operating and investing of negative $10 million to negative $12 million. Full-year revenue guidance was unchanged at $160 million to $164 million.
• Management sees potential growth opportunities from its Wave Neuroscience partnership, an EHR integration, and a planned Compass Pathways launch in 2027. These opportunities remain subject to regulatory, commercial, and reimbursement execution.

Neuronetics Price Performance

STIM stock traded up $0.57 during trading on Wednesday, hitting $2.83. 3,478,042 shares of the stock traded hands, compared to its average volume of 1,986,456. The stock has a market cap of $215.80 million, a price-to-earnings ratio of -6.44 and a beta of 1.36. Neuronetics has a one year low of $0.80 and a one year high of $3.44. The company has a current ratio of 1.88, a quick ratio of 1.69 and a debt-to-equity ratio of 2.84. The company has a 50 day simple moving average of $2.49 and a 200 day simple moving average of $1.87.

Insiders Place Their Bets

In other news, major shareholder Jorey Chernett acquired 18,000 shares of the company's stock in a transaction dated Friday, October 30th. The stock was bought at an average price of $2.27 per share, with a total value of $40,860.00. Following the completion of the acquisition, the insider owned 10,620,988 shares in the company, valued at approximately $24,109,642.76. This represents a 0.17% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available through this hyperlink. Corporate insiders own 8.40% of the company's stock.

Wall Street Analyst Weigh In

STIM has been the topic of a number of recent research reports. Citigroup reiterated a "market outperform" rating on shares of Neuronetics in a research note on Tuesday, July 21st. BTIG Research reaffirmed a "buy" rating and set a $6.00 price objective on shares of Neuronetics in a report on Thursday, September 17th. B. Riley Financial initiated coverage on shares of Neuronetics in a research report on Friday, September 11th. They set a "buy" rating on the stock. Weiss Ratings reissued a "sell (e+)" rating on shares of Neuronetics in a research note on Monday, September 14th. Finally, Wall Street Zen raised shares of Neuronetics from a "sell" rating to a "hold" rating in a research note on Sunday, July 12th. Four equities research analysts have rated the stock with a Buy rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $4.67.

About Neuronetics

Neuronetics, Inc is a medical technology company that develops and commercializes noninvasive treatments for psychiatric and neurological disorders. Its primary product is NeuroStar TMS Therapy, which uses transcranial magnetic stimulation to deliver targeted magnetic pulses to areas of the brain associated with mood regulation.

NeuroStar TMS Therapy is cleared by the U.S. Food and Drug Administration for treating major depressive disorder in adults and adolescents, obsessive-compulsive disorder, and depression with anxious distress.

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