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Neuropace, Inc. (NPCE)
:NPCE
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NeuroPace
(NASDAQ:NPCE)
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Rating:53Neutral
Price Target:
$10.50
▼(-3.85% Downside)
NeuroPace's overall stock score is driven by strong earnings call performance, highlighting revenue growth and strategic initiatives. However, financial performance issues, including high debt and negative cash flow, weigh heavily on the score. Technical indicators show moderate bullish momentum, but valuation concerns persist due to ongoing losses.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand for NeuroPace's RNS System, enhancing its competitive position and supporting long-term business expansion.
Gross Margin Improvement
Improved gross margins reflect operational efficiency and pricing power, contributing to better profitability and financial health over time.
Successful Debt Refinancing
Refinancing debt on better terms reduces financial risk and provides the company with increased flexibility to invest in growth initiatives.
Negative Factors
High Debt Levels
High debt levels can strain cash flow and limit financial flexibility, potentially impacting long-term stability and operational capacity.
Negative Cash Flow
Negative cash flow suggests challenges in generating sufficient cash from operations, which may hinder the ability to fund growth and meet financial obligations.
Increased Operating Expenses
Rising operating expenses can pressure margins and profitability, necessitating careful cost management to sustain financial health.
NeuroPace (NPCE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$361.25M
Dividend YieldN/A
Average Volume (3M)170.99K
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth23.32%
EPS Growth23.29%
CountryUS
Employees184
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-0.26
Shares Outstanding33,081,497
10 Day Avg. Volume139,976
30 Day Avg. Volume170,988
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue4.24
Enterprise Value/Gross Profit5.60
Enterprise Value/Ebitda-23.14
Forecast
1Y Price Target
$16.67Price Target Upside52.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
NeuroPace Business Overview & Revenue Model
Company DescriptionNeuroPace, Inc. operates as a medical device company in the United States. It develops and sells RNS system, a brain-responsive neuromodulation system for treating medically refractory focal epilepsy by delivering personalized real-time treatment at the seizure source. The company's RNS system also records continuous brain activity data; and enables clinicians to monitor patients in person and remotely. It sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. The company was incorporated in 1997 and is headquartered in Mountain View, California.
How the Company Makes MoneyNeuroPace generates revenue primarily through the sale of its RNS System and its associated services. The company sells its devices to hospitals, clinics, and healthcare providers, who then implant them into eligible patients. Key revenue streams include the initial sale of the RNS System, which comprises the implantable device and the external components, as well as ongoing revenues from patient monitoring services and device maintenance. Partnerships with healthcare institutions and neurologists play a significant role in driving adoption of the RNS System, while reimbursement from insurance providers for the device and its implantation also contributes to the company’s earnings. Additionally, NeuroPace may benefit from research collaborations and clinical studies that validate the effectiveness of its technology, further enhancing its market position.
NeuroPace Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with record revenue and improved gross margins, alongside successful debt refinancing and positive clinical trial data. However, challenges included increased operating expenses, a higher net loss, and the NAUTILUS trial not meeting its primary effectiveness endpoint.Q2-2025 Updates
Positive Updates
Record Revenue Growth
NeuroPace reported a record revenue of $23.5 million for Q2 2025, representing a 22% growth compared to $19.3 million in the previous year.
Strong Gross Margin Performance
The company achieved a total gross margin above 77% and an RNS gross margin above 80%. The gross margin guidance for the full year was raised to a range of 75% to 76%.
Successful Debt Refinancing
NeuroPace completed a refinancing of its existing debt, securing more favorable terms and enhancing financial flexibility.
Positive Clinical Trial Results
The Post-Approval Study showed a 100% median percent seizure reduction at 24 and 36 months post-implant for patients with generalized tonic-clonic seizures.
Encouraging NAUTILUS Trial Data
NAUTILUS trial data showed highly statistically significant and clinically meaningful reductions in seizure frequency, with a median seizure reduction better than 80% at 18 and 24 months.
Negative Updates
Increased Operating Expenses
Operating expenses grew to $25 million in Q2 2025 compared to $20.4 million in Q2 2024, impacted by one-time expenses related to executive transition.
Net Loss Increased
NeuroPace reported a net loss of $8.7 million for Q2 2025, compared to a net loss of $7.5 million in Q2 2024.
NAUTILUS Trial Primary Endpoint Not Met
The NAUTILUS trial did not meet its primary effectiveness endpoint due to the prespecified analysis method's inability to account for a small subset of patients with highly variable seizure frequencies.
Company Guidance
During NeuroPace, Inc.'s Second Quarter 2025 earnings call, the company provided updated financial guidance, reflecting a strong performance. NeuroPace reported record revenue of $23.5 million for the quarter, marking a 22% increase from the previous year. The company adjusted its full-year revenue guidance to a range of $94 million to $98 million, up from the prior range of $93 million to $97 million, and raised its gross margin guidance to between 75% and 76%. Operating expenses, excluding one-time items, grew by 13%, staying below the revenue growth rate. The RNS System revenue grew 16% during the quarter, contributing to this performance. NeuroPace also highlighted successful refinancing of its debt, providing financial flexibility, and discussed ongoing clinical development programs, including its NAUTILUS trial and Project CARE. The company expressed confidence in its growth trajectory, bolstered by clinical data, strategic partnerships, and planned innovations.NeuroPace Financial Statement Overview
Summary
NeuroPace shows positive revenue growth, but faces challenges with profitability and liquidity. High debt levels and negative cash flow indicate financial risk.Income Statement
NeuroPace shows a positive revenue growth trend with a 22% increase from the previous year. However, the company is facing challenges with profitability as reflected in negative EBIT and net income margins. The gross profit margin remains strong at 74%, but the net profit margin remains at 0%, indicating operational challenges.45
Neutral
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio due to substantial debt levels, indicating potential financial risk. Equity has significantly decreased, impacting financial stability. The equity ratio is low at about 8%, highlighting reliance on debt financing.35
Negative
Cash Flow
NeuroPace's free cash flow remains negative, indicating cash constraints. The free cash flow growth shows a slight improvement but remains negative, and the operating cash flow to net income ratio is unfavorable, reflecting cash generation issues relative to reported earnings.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 88.57M | 79.91M | 65.42M | 45.52M | 45.18M | 41.14M |
| Gross Profit | 67.08M | 59.09M | 48.12M | 32.49M | 33.44M | 30.27M |
| EBITDA | -16.22M | -16.57M | -22.83M | -36.57M | -28.37M | -12.48M |
| Net Income | -17.29M | -27.14M | -32.96M | -47.08M | -36.08M | -24.28M |
Balance Sheet | ||||||
| Total Assets | 106.11M | 94.65M | 107.65M | 114.11M | 133.56M | 55.95M |
| Cash, Cash Equivalents and Short-Term Investments | 62.14M | 52.76M | 66.45M | 77.41M | 115.58M | 38.08M |
| Total Debt | 71.52M | 73.34M | 72.39M | 69.77M | 49.85M | 52.86M |
| Total Liabilities | 86.68M | 86.63M | 87.00M | 79.33M | 60.06M | 203.78M |
| Stockholders Equity | 19.44M | 8.01M | 20.65M | 34.78M | 73.50M | -6.41M |
Cash Flow | ||||||
| Free Cash Flow | -16.23M | -18.25M | -19.87M | -37.47M | -24.96M | -21.67M |
| Operating Cash Flow | -16.09M | -17.95M | -19.70M | -36.87M | -24.58M | -21.61M |
| Investing Cash Flow | 3.16M | 8.99M | 23.03M | 23.80M | -85.40M | -10.77M |
| Financing Cash Flow | 22.95M | 4.33M | 8.13M | 490.00K | 102.53M | 55.01M |
NeuroPace Technical Analysis
Positive
10.92
Price Trends
9.40
Positive
10.72
Positive
11.42
Negative
Market Momentum
0.29
Negative
67.26
Neutral
64.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NPCE, the sentiment is Positive. The current price of 10.92 is above the 20-day moving average (MA) of 10.11, above the 50-day MA of 9.40, and below the 200-day MA of 11.42, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 67.26 is Neutral, neither overbought nor oversold. The STOCH value of 64.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NPCE.
NeuroPace Risk Analysis
NeuroPace disclosed 61 risk factors in its most recent earnings report. NeuroPace reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NeuroPace Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $338.84M | 24.42 | 7.64% | ― | 6.15% | -54.24% | |
63 Neutral | $372.55M | 243.96 | 4.09% | ― | 491.35% | ― | |
53 Neutral | $361.25M | ― | -176.94% | ― | 23.32% | 23.29% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $463.43M | ― | 26.25% | ― | ― | ― | |
50 Neutral | $360.06M | ― | -11.66% | ― | 27.68% | 20.87% | |
41 Neutral | $377.20M | ― | -102.61% | ― | 5.94% | 25.16% |
* Healthcare Sector Average
NPCE
NeuroPace
10.92
4.24
63.47%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.