NeuroPace (NPCE) AI Stock Analysis

• Market Cap: $431.30M
• Dividend Yield: N/A
• Average Volume (3M): 387.93K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.99
• Revenue Growth: 22.05%
• EPS Growth: 29.86%
• Country: US
• Employees: 184
• Sector: Healthcare
• Sector Strength: 42
• Industry: Medical - Devices
• EPS (TTM): -0.21
• Shares Outstanding: 32,798,504
• 10 Day Avg. Volume: 498,895
• 30 Day Avg. Volume: 387,927
• PEG Ratio: -2.21
• Price to Book (P/B): 37.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -17.91
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $17.60
• Price Target Upside: 33.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 50 Neutral
• Price Target: $13.00 ▼(-1.14%Downside)

NeuroPace's overall score reflects strong revenue growth and positive corporate events, yet is weighed down by significant financial risks and valuation challenges. The earnings call provided a positive outlook, but the company's high debt levels and negative cash flow remain critical concerns.

Positive Factors

Financial Performance

NPCE reaffirmed its 2025 financial guidance, increasing revenue guidance and maintaining gross margin and operating expense expectations.

Product Efficacy

Patients who have reached 2-year follow-up have already shown over 80% median seizure reduction, a level not seen until 3-year follow-up in the focal RCT which drove FDA approval within that patient population.

Regulatory Approval

NPCE has a solid case to support FDA approval in IGE based on the totality of the NAUTILUS data.

Negative Factors

Price Target Revision

Analyst decreases the price target for NPCE from $18 to $16.

Regulatory Risk

The NAUTILUS announcement creates additional near-term regulatory risk for the company.

Study Results

The study did not show statistical significance on its primary efficacy endpoint at 1-year follow-up.

NeuroPace Business Overview & Revenue Model

Company Description

NeuroPace, 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 Money

NeuroPace generates revenue primarily through the sale of its RNS® System to hospitals and medical institutions. The company makes money by charging for the initial implantation of the device as well as through ongoing monitoring and management services associated with the device's use. Revenue is also derived from follow-up procedures and replacement parts or upgrades. NeuroPace works closely with healthcare providers and insurance companies to ensure its devices are accessible to patients, which can also influence its revenue streams. Additionally, strategic partnerships and collaborations within the medical technology industry may contribute to its financial performance.

NeuroPace Financial Statement Overview

Summary

NeuroPace shows strong revenue growth of 22% year-over-year, but faces profitability challenges with negative EBIT and net income margins. The high debt-to-equity ratio and negative free cash flow highlight financial risks and cash constraints. Despite a strong gross profit margin, the overall financial position is strained, requiring improved operational efficiencies and financial management.

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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
79.91M	65.42M	45.52M	45.18M	41.14M
	Gross Profit
59.09M	48.12M	32.49M	33.44M	30.27M
	EBIT
-21.67M	-27.17M	-40.79M	-23.74M	-13.05M
	EBITDA
-16.57M	-22.83M	-36.57M	-28.37M	-12.48M
	Net Income Common Stockholders
-27.14M	-32.96M	-53.37M	-38.11M	-35.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
52.76M	66.45M	77.41M	115.58M	38.08M
	Total Assets
94.65M	107.65M	114.11M	133.56M	55.95M
	Total Debt
73.34M	72.39M	69.77M	49.85M	52.86M
	Net Debt
59.91M	54.34M	63.16M	30.66M	26.47M
	Total Liabilities
86.63M	87.00M	79.33M	60.06M	203.78M
	Stockholders Equity
8.01M	20.65M	34.78M	73.50M	-147.83M
Cash Flow		Free Cash Flow
-17.95M	-19.87M	-37.47M	-24.96M	-21.67M
	Operating Cash Flow
-17.95M	-19.70M	-36.87M	-24.58M	-21.61M
	Investing Cash Flow
8.99M	23.03M	23.80M	-85.40M	-10.77M
	Financing Cash Flow
4.33M	8.13M	490.00K	102.53M	55.01M

NeuroPace Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 13.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NPCE, the sentiment is Neutral. The current price of 13.15 is below the 20-day moving average (MA) of 14.79, above the 50-day MA of 12.89, and above the 200-day MA of 10.66, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 44.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NPCE.

NeuroPace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRTS	65 Neutral	$80.91M	44.77	3.46%	―	24.75%	-61.29%
CLPT	61 Neutral	$393.73M	―	-76.21%	―	23.22%	9.54%
Sector *	54 Neutral	$5.31B	3.28	-45.10%	2.80%	16.76%	0.02%
CVRX	52 Neutral	$171.04M	―	-76.01%	―	25.62%	11.86%
NPCE	50 Neutral	$431.30M	―	-128.49%	―	22.05%	29.86%
SENS	49 Neutral	$397.44M	―	-161.19%	―	1.64%	16.02%
NNOX	46 Neutral	$352.60M	―	-30.11%	―	15.32%	15.73%

NeuroPace Corporate Events

NeuroPace Secures $75 Million Credit Facility with MidCap

On June 4, 2025, NeuroPace, Inc. entered into a $75 million credit facility with MidCap Financial, comprising a $60 million term loan and a $15 million revolving credit facility. This new financing arrangement allowed NeuroPace to repay its existing loan with CRG Partners IV, L.P., and the revolving credit will support working capital and corporate purposes. The favorable terms of the new credit facility are expected to reduce cash interest expenses and support NeuroPace’s growth initiatives, including expanding access to the RNS System and investing in new product developments.

The most recent analyst rating on (NPCE) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on NeuroPace stock, see the NPCE Stock Forecast page.

NeuroPace Announces Promising NAUTILUS Study Results

On May 27, 2025, NeuroPace announced the preliminary one-year results of its NAUTILUS study, which evaluates the safety and effectiveness of the RNS System for treating drug-resistant idiopathic generalized epilepsy. The study met its primary safety endpoint and showed significant seizure reduction in a key patient subgroup, suggesting potential benefits for a substantial portion of patients. NeuroPace plans to engage with the FDA regarding regulatory pathways and is confident in its long-term growth strategy, reaffirming its 2025 financial guidance.

The most recent analyst rating on (NPCE) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on NeuroPace stock, see the NPCE Stock Forecast page.

NeuroPace Expects Minimal Impact from Trade Tariffs

On April 14, 2025, NeuroPace announced that it expects minimal impact from international trade tariffs on its operations and financial results, reaffirming its gross margin guidance for 2025. The company, which primarily manufactures and sells its devices in the U.S., anticipates no significant effect on its gross margin despite terminating its SEEG distribution agreement with DIXI Medical effective October 1, 2025. NeuroPace will report its first quarter 2025 financial results on May 13, 2025, with a conference call scheduled for the same day.

NeuroPace Shifts Focus to Core RNS System

On April 2, 2025, NeuroPace, Inc. announced a strategic shift in its product portfolio, focusing on its core RNS System and ending its distribution agreement with DIXI Medical USA Corp. for SEEG products by September 30, 2025. This move is part of a broader plan to concentrate resources on expanding opportunities for the RNS System, including new indications and AI-enabled software, while maintaining 2025 revenue guidance and aiming for cash flow breakeven by 2027.