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Neuronetics Inc (STIM)
NASDAQ:STIM
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Neuronetics
(NASDAQ:STIM)
54Neutral
Positive Factors
Financial Performance
STIM reported Q4 revenue of $22.5M, slightly ahead of the company’s preannouncement, indicating strong financial performance.
Merger Benefits
The combination with Greenbrook is off to a good start, leading to a reaffirmation of the BUY recommendation with a target price increase to $8 from $5.
Negative Factors
Operational Challenges
STIM's second quarter reflected a top-line miss due to disruption from the Change Healthcare cybersecurity breach impacting the company's capital and treatment session sales.
Neuronetics (STIM) vs. S&P 500 (SPY)
Market Cap
$173.50M
Dividend YieldN/A
Average Volume (3M)2.14M
Price to Earnings (P/E)―
Beta (1Y)1.95
Revenue Growth5.03%
EPS Growth-3.71%
CountryUS
Employees203
SectorHealthcare
Sector Strength78
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)-1.37
Shares Outstanding40,069,267
10 Day Avg. Volume2,072,993
30 Day Avg. Volume2,144,575
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.81
Price to Cash Flow (P/CF)-6.10
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.83Price Target Upside50.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Neuronetics Business Overview & Revenue Model
Company DescriptionNeuronetics, Inc. commercial stage medical technology company. It focuses on designing, developing and marketing products for the patients suffering from psychiatric disorders. The firm offers NeuroStar TMS, a therapy system for the treatment of major depressive disorders in adult patients. It also provides a range of support services, including patient education, practice data management system, and customer and technical services to help the client start and manage TMS therapy systems. The company was founded by Steven B. Waite, Bruce J. Shook, Norman R. Weldon and Thomas D. Weldon in April 2003 and is headquartered in Malvern, PA.
How the Company Makes MoneyNeuronetics generates revenue primarily through the sale and lease of its NeuroStar Advanced Therapy Systems to healthcare providers and clinics. The company also derives income from recurring revenue streams, such as the sale of treatment sessions and maintenance service agreements for the NeuroStar systems. By establishing partnerships with mental health professionals and clinics, Neuronetics expands its market reach and increases the adoption of its TMS technology. Additionally, the company invests in research and development to enhance its product offerings and maintain a competitive edge in the mental health treatment market.
Neuronetics Financial Statement Overview
Summary
Neuronetics experiences moderate revenue growth but struggles with profitability due to negative net margins and high leverage. The strong gross profit margin is overshadowed by significant financial instability and negative cash flow.Income Statement
Neuronetics shows some positive revenue growth with a TTM revenue increase of 1.9% compared to the previous year. However, the company is struggling with profitability, as evidenced by its negative net profit margin and EBIT margin. The gross profit margin remains solid at approximately 74.2%, indicating efficient production processes, but the consistent negative EBIT and net income are concerning.42
Neutral
Balance Sheet
The company's balance sheet is weak, with a high debt-to-equity ratio of 5.19 in the TTM period, indicating high leverage and potential financial risk. The equity ratio at 12.66% reflects a low level of stockholders' equity relative to total assets, suggesting a fragile capital structure. Additionally, the return on equity is negative, further signaling financial instability.38
Negative
Cash Flow
Neuronetics' cash flow situation is challenging, with negative free cash flow and a free cash flow to net income ratio indicating ongoing cash deficits. Although there is a slight improvement in free cash flow growth, the operating cash flow remains negative, raising concerns about the company's ability to fund operations without external financing.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 72.71M | 71.35M | 65.21M | 55.31M | 49.24M | 62.66M | Gross Profit |
| 53.98M | 51.70M | 49.72M | 43.66M | 37.69M | 47.27M | EBIT |
| -27.52M | -30.55M | -35.11M | -27.56M | -22.31M | -26.93M | EBITDA |
| -26.92M | -22.76M | -31.26M | -26.55M | -21.07M | -26.93M | Net Income Common Stockholders |
| -36.42M | -30.19M | -39.21M | -35.60M | -32.28M | -34.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 60.58M | 60.58M | 71.88M | 96.34M | 50.84M | 76.59M | Total Assets |
| 115.83M | 115.83M | 116.88M | 141.22M | 78.66M | 100.17M | Total Debt |
| 62.47M | 62.47M | 39.74M | 39.54M | 38.34M | 34.33M | Net Debt |
| 2.80M | 2.80M | -30.59M | -54.60M | -10.62M | -41.38M | Total Liabilities |
| 81.64M | 81.64M | 59.82M | 56.05M | 53.16M | 52.32M | Stockholders Equity |
| 34.19M | 34.19M | 57.06M | 85.17M | 25.49M | 47.85M |
| Cash Flow | Free Cash Flow | ||||
| -22.52M | -34.41M | -34.01M | -30.34M | -29.12M | -31.30M | Operating Cash Flow |
| -20.27M | -32.04M | -30.74M | -27.98M | -28.39M | -30.48M | Investing Cash Flow |
| -600.00K | -1.32M | 6.73M | -9.84M | -730.00K | -813.00K | Financing Cash Flow |
| 5.89M | 22.70M | 207.00K | 83.01M | 2.37M | 2.42M |
Neuronetics Technical Analysis
Positive
4.54
Price Trends
3.24
Positive
2.14
Positive
1.79
Positive
Market Momentum
0.42
Positive
54.65
Neutral
30.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STIM, the sentiment is Positive. The current price of 4.54 is above the 20-day moving average (MA) of 4.51, above the 50-day MA of 3.24, and above the 200-day MA of 1.79, indicating a bullish trend. The MACD of 0.42 indicates Positive momentum. The RSI at 54.65 is Neutral, neither overbought nor oversold. The STOCH value of 30.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STIM.
Neuronetics Risk Analysis
Neuronetics disclosed 70 risk factors in its most recent earnings report. Neuronetics reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Neuronetics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $16.65B | 40.95 | 43.03% | ― | 22.07% | 101.95% | |
56 Neutral | $1.21B | ― | -33.30% | ― | 25.74% | 57.18% | |
54 Neutral | $173.50M | ― | -138.47% | ― | 5.03% | -3.71% | |
54 Neutral | $2.01B | 32.24 | 4.87% | ― | 8.33% | 256.54% | |
52 Neutral | $969.24M | 55.81 | -5.16% | ― | -2.64% | -193.31% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
43 Neutral | $2.23B | ― | -46.67% | ― | 18.82% | 19.76% |
* Healthcare Sector Average
Performance Comparison
STIM
Neuronetics
4.54
0.23
5.34%
PODD
Insulet
245.35
63.52
34.93%
STAA
Staar Surgical
18.34
-19.30
-51.28%
TNDM
Tandem Diabetes Care
17.89
-12.02
-40.19%
NVCR
NovoCure
21.32
6.03
39.44%
LIVN
LivaNova
39.06
-12.92
-24.86%
Neuronetics Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 6.57% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements, including revenue growth, a transformative acquisition, and successful program implementations. However, challenges such as decreased gross margins, increased operating expenses, and a net loss were also noted. The company is confident in its growth strategy for 2025.Highlights
Revenue Growth and Greenbrook Acquisition
Total revenue for Q4 2024 was $22.5 million, an increase of 11% over Q4 2023. The acquisition of Greenbrook TMS transformed Neuronetics into a vertically integrated mental health care provider.
Better Me Provider Program Success
The BMP program expanded to over 350 sites, increasing patient volume by 36%. Practices in the BMP program are treating 3 times more patients per quarter than non-BMP practices.
FDA Clearance for Adolescent Treatment
NeuroStar received FDA clearance as the first and only TMS treatment approved as a first-line therapy for depression in adolescents aged 15 to 21, expanding the total addressable market.
Cost Synergies and Financial Flexibility
Captured over 90% of the identified $22 million in annualized cost synergies from the Greenbrook acquisition, strengthening the balance sheet and providing flexibility for growth.
Lowlights
Decreased Gross Margin
Gross margin was 66.2% in Q4 2024, down from 77.6% in the prior year quarter, primarily due to the inclusion of the Greenbrook Clinics business.
Increased Operating Expenses
Operating expenses increased by 28% to $25.8 million, mainly due to professional fees incurred on acquisition and the inclusion of Greenbrook's expenses.
Net Loss and Negative EBITDA
Net loss for Q4 2024 was $12.1 million, compared to a net loss of $5.4 million in Q4 2023. EBITDA was negative $10.5 million, impacted by non-recurring expenses related to the Greenbrook acquisition.
Cash and Cash Equivalents Decline
Cash and cash equivalents decreased to $18.5 million as of December 31, 2024, compared to $59.7 million at the end of 2023.
Company Guidance
During the Neuronetics Fourth Quarter 2024 Financial and Operating Results Conference Call, several key metrics and guidance for 2025 were discussed. The company reported a total revenue of $22.5 million for Q4 2024, marking an 11% increase over the previous year. Revenue from the NeuroStar system was $3.8 million with 46 systems shipped, while U.S. treatment session revenue was $12.9 million. The U.S. clinic revenue, largely from the Greenbrook acquisition, was $4.4 million. The gross margin decreased to 66.2% from 77.6% in the prior year, primarily due to the integration of Greenbrook Clinics. Operating expenses rose to $25.8 million, a 28% increase, partly due to acquisition costs. The net loss for the quarter was $12.1 million, translating to $0.33 per share. EBITDA was reported as negative $10.5 million, with non-recurring expenses accounting for much of this figure. For 2025, Neuronetics provided revenue guidance of $145 million to $155 million, with a gross margin around 55% and operating expenses between $90 million and $98 million. The company anticipates being cash flow positive by the third quarter of 2025, bolstered by identified cost synergies and a recent $18.9 million capital raise.Neuronetics Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Neuronetics Projects Growth Following Greenbrook Acquisition
Positive
Jan 13, 2025
Neuronetics announced its preliminary financial results for 2024 and issued guidance for 2025, following its acquisition of Greenbrook TMS Inc. The company expects a 12% to 19% increase in revenue for 2025 and aims to achieve cash flow breakeven by the third quarter. The acquisition is seen as a transformative step, combining Neuronetics’ technology with Greenbrook’s clinic network to enhance revenue growth and cost efficiency. Neuronetics also highlighted its Better Me Provider program and recent FDA clearance for its NeuroStar therapy as adjunct treatment for adolescent depression, expanding its market significantly.
Delistings and Listing ChangesM&A Transactions
Neuronetics Expands with Greenbrook TMS Acquisition
Positive
Dec 10, 2024
Neuronetics, Inc. announced the successful acquisition of Greenbrook TMS Inc., consolidating their position in the mental health industry. This transaction will enhance their operational capabilities by integrating Neuronetics’ technology with Greenbrook’s treatment network, aiming to expand access to mental health treatments and achieve cost synergies. Greenbrook’s shares will be removed from the OTCQB Market, and the combined entity will continue as Neuronetics, trading under the NASDAQ ticker STIM.
Delistings and Listing ChangesRegulatory Filings and Compliance
Neuronetics Regains Nasdaq Compliance with Bid Price
Positive
Nov 13, 2024
Neuronetics, Inc. has successfully regained compliance with Nasdaq’s minimum bid price requirement, ensuring its continued listing on The Nasdaq Global Market. After previously failing to meet the $1.00 per share minimum, the company achieved the necessary closing bid price for at least 10 consecutive business days, closing the compliance issue.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Neuronetics Sees Q3 Revenue Rise Amid Strategic Acquisition
Positive
Nov 12, 2024
Neuronetics reports a 4% revenue boost in Q3 2024, reaching $18.5 million, driven by increased U.S. sales of its NeuroStar Advanced Therapy systems. Despite a net loss of $13.3 million, the company is optimistic about its acquisition of Greenbrook TMS, expected to expand mental health services and drive future growth. The merger promises strategic advantages and potential financial synergies, positioning Neuronetics as a leading provider in the U.S. mental health sector.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.