Neuronetics (NASDAQ:STIM) Announces Earnings Results

Key Points

• Neuronetics beat quarterly expectations, reporting an adjusted loss of $0.05 per share versus the $0.12 consensus loss, while revenue reached $41.57 million compared with estimates of $40.17 million.
• Revenue increased 9.1% year over year to $41.6 million, adjusted EBITDA turned positive at $0.3 million, and the net loss narrowed to $3.4 million. Greenbrook revenue grew 16.8%, aided by provider growth, improved reimbursement and additional clinic capacity.
• Management raised its gross-margin outlook to 48%–50% and reduced operating-expense guidance, but warned of near-term revenue volatility as customers shift between NeuroStar treatment-session, purchase and lease models.

Neuronetics (NASDAQ:STIM - Get Free Report) released its earnings results on Tuesday. The company reported ($0.05) earnings per share for the quarter, topping analysts' consensus estimates of ($0.12) by $0.07, FiscalAI reports. The business had revenue of $41.57 million for the quarter, compared to the consensus estimate of $40.17 million. Neuronetics had a negative return on equity of 139.83% and a negative net margin of 24.48%.

Here are the key takeaways from Neuronetics' conference call:

• Revenue rose 9.1% to $41.6 million, while adjusted EBITDA improved to positive $0.3 million from negative $5.6 million a year ago. Net loss narrowed to $3.4 million, and cash used in operations and investing fell to $1.4 million.
• Greenbrook revenue increased 16.8% to $26.9 million, supported by provider growth, improved reimbursement and revenue-cycle management. Management said cash collections grew faster than revenue and identified further upside from increasing clinic occupancy, with roughly 40% of capacity still unused.
• Neuronetics is broadening NeuroStar’s commercial model to include outright purchases, lease financing and à la carte support alongside its traditional treatment-session model. Capital sales grew double digits, but session revenue declined double digits; management expects some near-term revenue volatility as customers shift among models.
• The company raised its full-year gross-margin outlook to 48%–50% and lowered operating-expense guidance to $95 million–$100 million, while narrowing revenue guidance to $160 million–$164 million. It expects cash flow from operations and investing of negative $10.5 million to negative $14.5 million for the year and limited net cash use in the second half.
• Management continues preparing Greenbrook for potential psychedelic treatment launches, particularly Compass Pathways’ COMP360, leveraging existing SPRAVATO infrastructure, trained staff and available clinic capacity. The company views its combination of TMS, SPRAVATO and future therapies as a potential differentiator in interventional psychiatry.

Neuronetics Stock Performance

Neuronetics stock opened at $2.99 on Tuesday. The stock has a 50-day simple moving average of $1.61 and a 200 day simple moving average of $1.55. The stock has a market capitalization of $208.21 million, a price-to-earnings ratio of -5.53 and a beta of 1.03. The company has a quick ratio of 1.50, a current ratio of 1.67 and a debt-to-equity ratio of 3.59. Neuronetics has a 12-month low of $0.80 and a 12-month high of $4.00.

Analyst Upgrades and Downgrades

A number of research analysts have commented on STIM shares. Weiss Ratings restated a "sell (e+)" rating on shares of Neuronetics in a research note on Thursday, June 18th. Citigroup reissued a "market outperform" rating on shares of Neuronetics in a report on Tuesday, July 21st. BTIG Research assumed coverage on Neuronetics in a research report on Monday, July 20th. They set a "buy" rating and a $5.00 target price for the company. Finally, Wall Street Zen raised Neuronetics from a "sell" rating to a "hold" rating in a research note on Sunday, July 12th. Three research analysts have rated the stock with a Buy rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $4.00.

Insiders Place Their Bets

In related news, major shareholder Jorey Chernett bought 100,000 shares of Neuronetics stock in a transaction dated Tuesday, May 19th. The shares were bought at an average cost of $1.17 per share, for a total transaction of $117,000.00. Following the completion of the transaction, the insider owned 10,553,988 shares of the company's stock, valued at approximately $12,348,165.96. This trade represents a 0.96% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Insiders own 8.40% of the company's stock.

Hedge Funds Weigh In On Neuronetics

Several large investors have recently bought and sold shares of STIM. Sherbrooke Park Advisers LLC bought a new position in Neuronetics during the third quarter worth about $33,000. Raymond James Financial Inc. bought a new position in shares of Neuronetics during the second quarter worth $37,000. Caption Management LLC acquired a new position in shares of Neuronetics in the 3rd quarter valued at $38,000. Abel Hall LLC bought a new stake in shares of Neuronetics in the 4th quarter valued at $39,000. Finally, Larson Financial Group LLC lifted its holdings in Neuronetics by 157.2% during the third quarter. Larson Financial Group LLC now owns 17,813 shares of the company's stock worth $49,000 after acquiring an additional 10,886 shares in the last quarter. 53.59% of the stock is currently owned by institutional investors and hedge funds.

Neuronetics Company Profile

Neuronetics, Inc is a commercial‐stage medical technology company that develops and markets non-invasive neuromodulation therapies for psychiatric and neurological disorders. The company's flagship product, the NeuroStar Advanced Therapy System, uses repetitive transcranial magnetic stimulation (rTMS) to deliver targeted magnetic pulses to areas of the brain implicated in major depressive disorder (MDD). NeuroStar Advanced Therapy has received U.S. Food and Drug Administration clearance for the treatment of adults with treatment-resistant depression and is supported by a growing body of clinical evidence demonstrating its safety and efficacy.

Founded in 2003 and headquartered in Malvern, Pennsylvania, Neuronetics focuses on advancing clinical care through innovation in neurostimulation.

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