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Neuronetics Inc (STIM)
NASDAQ:STIM
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Neuronetics (STIM) AI Stock Analysis

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STIM

Neuronetics

(NASDAQ:STIM)

Rating:45Neutral
Price Target:
$3.50
▲(3.55% Upside)
Neuronetics faces significant financial challenges, with ongoing losses and cash flow issues being the most critical factors. While recent strategic initiatives and revenue growth are positive, the company's high leverage and negative valuation metrics weigh heavily on its overall score. Technical indicators also suggest a bearish trend, further impacting the stock's attractiveness.
Positive Factors
Acquisition 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.
Growth Strategy
Neuronetics is set for a double-digit top-line trajectory and positive cash flow, with expectations for significant pro forma revenue growth.
Revenue Performance
STIM reported a solid Q1 operationally, with revenue of $32.0M, well above consensus estimates.
Negative Factors
Acquisition Risks
There are underlying risks with acquisitions, particularly given the two different business models at Neuronetics and Greenbrook on top of a continued uncertain macroeconomic environment.
Cash Burn
The stock traded off on the higher-than-expected cash burn for Q1.
Gross Margin
Management ultimately lowered gross margin guidance as Greenbrook will be a bigger piece of overall revenue than initially expected.

Neuronetics (STIM) vs. SPDR S&P 500 ETF (SPY)

Neuronetics Business Overview & Revenue Model

Company DescriptionNeuronetics, Inc. is a medical technology company focused on developing and commercializing non-invasive therapies for neuropsychiatric disorders. The company operates primarily in the healthcare sector, offering innovative solutions for conditions such as major depressive disorder (MDD) through its flagship product, the NeuroStar Advanced Therapy System. This system uses transcranial magnetic stimulation (TMS) to provide an alternative treatment for patients who have not responded to traditional therapies.
How the Company Makes MoneyNeuronetics generates revenue primarily through the sale of its NeuroStar Advanced Therapy Systems and associated disposables, such as treatment coils and patient kits. The company operates on a model that includes both direct sales to healthcare providers and leasing options for its systems. Additional revenue streams come from the sale of maintenance services and training for healthcare professionals. Significant partnerships with healthcare institutions and providers enhance its market presence and drive sales, while reimbursement policies from insurance companies for TMS therapy also play a crucial role in facilitating patient access and adoption of their technology, thereby contributing to the company's earnings.

Neuronetics Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: -27.47%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance in revenue growth and strategic initiatives, particularly in clinic expansion and adolescent patient engagement. However, challenges in gross margin and delayed positive cash flow targets indicate areas needing improvement.
Q2-2025 Updates
Positive Updates
Record Revenue Growth
Total revenue was $38.1 million, an 18% year-over-year increase on an adjusted pro forma basis.
NeuroStar System Performance
NeuroStar system revenue was $3.5 million with 41 systems shipped, maintaining a system ASP greater than $85,000.
U.S. Clinic Revenue Achievements
U.S. clinic revenue was $23 million, marking the largest quarterly clinic revenue to date.
Cash Flow Improvement
Cash used in operations was $3.5 million, better than the previously guided target of under $5 million.
Adolescent Patient Growth
25% growth in adolescent new patient starts in the first half of 2025 compared to 2024.
SPRAVATO Rollout Momentum
SPRAVATO therapy offered in 77 of 83 eligible clinics, with full rollout expected by year-end.
Negative Updates
Gross Margin Decline
Gross margin was 46.6%, down from 74% in the prior year quarter, primarily due to the inclusion of Greenbrook's lower margin clinic business.
Operating Expenses Increase
Operating expenses increased by $5.1 million or 25% compared to the second quarter of 2024.
Net Loss Consistency
Net loss for the quarter was $9.8 million, unchanged from the prior year quarter.
Delayed Positive Cash Flow Target
Target for positive cash flow from operations has been delayed to the fourth quarter of 2025, impacted by updated expectations for gross margin mix.
Company Guidance
During the Neuronetics second quarter 2025 earnings call, the company provided a comprehensive overview of its financial performance and strategic initiatives. Total revenue for the quarter was reported at $38.1 million, marking an 18% year-over-year increase on an adjusted pro forma basis. The NeuroStar business contributed $15.1 million to this, with system revenue of $3.5 million from 41 systems shipped and U.S. treatment session revenue at $10.8 million, up 13% pro forma. U.S. clinic revenue achieved a record $23 million, driven by Greenbrook's operations. The company also reported cash usage in operations at $3.5 million, surpassing the previous guidance of under $5 million. Looking forward, Neuronetics maintained its full-year revenue guidance of $149 million to $155 million, while adjusting its gross margin expectations to between 48% and 50% due to a shift in revenue mix. The company is also targeting to achieve positive cash flow from operations by the fourth quarter of 2025, bolstered by improvements in its operational efficiencies and cash collection processes.

Neuronetics Financial Statement Overview

Summary
Neuronetics faces ongoing financial challenges with consistent losses and cash flow difficulties. Despite modest revenue growth, profitability remains elusive due to high leverage and reliance on external financing.
Income Statement
40
Negative
Neuronetics shows a modest revenue growth over the years, with a 4.96% increase from 2023 to 2024. However, the company has consistently reported negative EBIT and net income margins, indicating ongoing profitability challenges. The gross profit margin remains relatively healthy, but the persistent negative EBITDA margin points to operational inefficiencies.
Balance Sheet
45
Neutral
The balance sheet reflects significant leverage with a high debt-to-equity ratio, although it has improved slightly from the previous year. The equity ratio is relatively low, suggesting limited financial flexibility. The company has maintained a positive cash position, yet declining stockholders' equity is a concern.
Cash Flow
35
Negative
Neuronetics has experienced negative free cash flow growth, with cash flows consistently in the red. The operating cash flow to net income ratio is negative, highlighting cash generation issues. The company relies heavily on financing activities to manage cash needs, which may not be sustainable long-term.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue111.11M74.89M71.35M65.21M55.31M49.24M
Gross Profit62.39M54.16M51.70M49.72M43.66M37.69M
EBITDA-38.61M-34.37M-22.76M-31.26M-26.55M-21.07M
Net Income-48.29M-43.71M-30.19M-39.21M-35.60M-32.28M
Balance Sheet
Total Assets134.65M140.90M115.83M116.88M141.22M78.66M
Cash, Cash Equivalents and Short-Term Investments11.14M18.66M60.58M71.88M96.34M50.84M
Total Debt80.66M82.63M62.47M39.74M39.54M38.34M
Total Liabilities103.14M109.10M81.64M59.82M56.05M53.16M
Stockholders Equity27.15M27.71M34.19M57.06M85.17M25.49M
Cash Flow
Free Cash Flow-35.46M-32.46M-34.41M-34.01M-30.34M-29.12M
Operating Cash Flow-34.51M-31.00M-32.04M-30.74M-27.98M-28.39M
Investing Cash Flow-2.83M-2.41M-1.32M6.73M-9.84M-730.00K
Financing Cash Flow12.17M-6.81M22.70M207.00K83.01M2.37M

Neuronetics Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3.38
Price Trends
50DMA
3.80
Negative
100DMA
3.92
Negative
200DMA
3.27
Positive
Market Momentum
MACD
-0.16
Positive
RSI
36.80
Neutral
STOCH
11.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STIM, the sentiment is Negative. The current price of 3.38 is below the 20-day moving average (MA) of 4.02, below the 50-day MA of 3.80, and above the 200-day MA of 3.27, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 36.80 is Neutral, neither overbought nor oversold. The STOCH value of 11.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
57
Neutral
£5.54B4.96-44.55%2.27%28.02%-9.61%
55
Neutral
$193.91M-101.41%-47.56%-65.54%
53
Neutral
$143.54M-1552.23%22.56%41.62%
49
Neutral
$59.64M-219.68%25.70%39.23%
45
Neutral
$222.84M-207.57%54.17%-2.43%
45
Neutral
$401.71M-60.26%0.36%22.13%
42
Neutral
$85.64M-44.24%0.93%13.99%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STIM
Neuronetics
3.40
2.44
254.17%
ACRS
Aclaris Therapeutics
1.80
0.59
48.76%
MDXH
MDxHealth
3.29
0.42
14.63%
PSNL
Personalis
4.83
-1.14
-19.10%
BDSX
Biodesix
0.45
-1.36
-75.14%
SERA
Sera Prognostics
2.38
-5.05
-67.97%

Neuronetics Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Neuronetics Reports Q2 2025 Financial Results Surge
Positive
Aug 5, 2025

Neuronetics, Inc. announced its financial and operational results for the second quarter of 2025, highlighting a significant revenue increase of 132% compared to the same period in 2024, primarily due to the acquisition of Greenbrook TMS Inc. The company reported a total revenue of $38.1 million, with U.S. clinic revenue reaching $23.0 million. Despite a decrease in gross margin to 46.6% from 74.0% in the previous year, the company reduced cash used in operations to $3.5 million, surpassing its target. The company also secured an additional $10 million in funding under its existing debt agreement with Perceptive Advisors LLC and extended its minimum liquidity requirement to September 2026. Neuronetics aims to achieve positive cash flow from operations in 2025 and continues to focus on strategic priorities to drive sustainable growth.

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Neuronetics Appoints New CFO Amid Strategic Expansion
Positive
Jul 15, 2025

On July 15, 2025, Neuronetics appointed Steven Pfanstiel as Executive Vice President, Chief Financial Officer, and Treasurer, succeeding Steve Furlong, who will retire in March 2026. Pfanstiel brings extensive experience from his previous roles in the healthcare industry, notably at Marinus Pharmaceuticals and LifeScan. His appointment is part of Neuronetics’ strategic vision to expand access to mental health treatments and achieve sustainable growth. The company also reaffirmed its financial guidance for the second quarter and full year 2025, highlighting its ongoing integration of Greenbrook operations and its path to achieving positive cash flow in the third quarter of 2025.

Executive/Board ChangesShareholder Meetings
Neuronetics Holds Annual Meeting, Elects Directors
Neutral
May 28, 2025

On May 22, 2025, Neuronetics, Inc. held its Annual Meeting of Stockholders, where 81.38% of eligible shares were represented. During the meeting, all director nominees were elected for a one-year term, KPMG LLP’s appointment as the independent auditor for 2025 was ratified, and executive compensation for 2024 was approved. However, a proposal to eliminate supermajority voting requirements in the company’s governance documents was not approved.

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.Date of analysis: Aug 19, 2025