Neuronetics (STIM) AI Stock Analysis

• Market Cap: $268.52M
• Dividend Yield: N/A
• Average Volume (3M): 1.45M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.52
• Revenue Growth: 4.96%
• EPS Growth: -29.29%
• Country: US
• Employees: 716
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -1.37
• Shares Outstanding: 65,814,514
• 10 Day Avg. Volume: 1,352,525
• 30 Day Avg. Volume: 1,446,681
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.03
• Price to Cash Flow (P/CF): -6.80
• P/FCF Ratio: 0.00
• 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: $6.83
• Price Target Upside: 81.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Neuronetics' stock faces significant financial challenges, with ongoing losses and cash flow difficulties. While strategic acquisitions and revenue growth provide some optimism, the company's high leverage and negative valuation metrics weigh heavily on its overall outlook. Technical indicators are mixed, and recent corporate events suggest potential for future improvement, but substantial risks remain.

Positive Factors

Acquisition Benefits

The acquisition is already showing benefits, with STIM expecting to reach cash flow positivity in Q3, with 90% of the anticipated deal synergies realized by year-end.

Growth Opportunities

Neuronetics is focusing on increasing the utilization of its systems and increasing revenue from SPRAVATO at Greenbrook clinics as key growth opportunities.

Negative Factors

Financial Pressure

The company continues to face headwinds, and the updated 2024 revenue and cash flow outlook exacerbated the pressure on the stock.

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 Business Overview & Revenue Model

Company Description

Neuronetics (STIM) is a medical technology company focused on developing non-invasive therapies for psychiatric and neurological disorders. The company's flagship product, NeuroStar Advanced Therapy System, is a transcranial magnetic stimulation (TMS) device designed to treat major depressive disorder. Operating in the healthcare and medical device sectors, Neuronetics aims to provide innovative solutions that enhance the quality of life for patients with mental health conditions.

How the Company Makes Money

Neuronetics generates revenue primarily through the sale and leasing of its NeuroStar Advanced Therapy Systems to healthcare providers, including hospitals, clinics, and private practices. The company also earns income from the sale of related consumables and accessories required for the operation of its TMS devices. Additionally, Neuronetics offers service and maintenance contracts for its systems, providing an ongoing revenue stream. Key partnerships with healthcare providers and institutions help expand the adoption of its technology, contributing to its earnings. Neuronetics' financial performance is influenced by factors such as the growing demand for mental health treatments, regulatory approvals, and the expansion of its customer base.

Neuronetics Financial Statement Overview

Summary

Neuronetics is facing ongoing financial challenges, with consistent losses and cash flow difficulties. While revenue shows some growth, profitability remains elusive. The high leverage and reliance on external financing pose risks, and the company needs to address its operational inefficiencies to improve its financial health.

Income Statement

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

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

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
72.71M	74.89M	71.35M	65.21M	55.31M	49.24M
	Gross Profit
53.98M	54.16M	51.70M	49.72M	43.66M	37.69M
	EBIT
-27.52M	-34.04M	-30.55M	-35.11M	-27.56M	-22.31M
	EBITDA
-26.92M	-34.04M	-22.76M	-31.26M	-26.55M	-21.07M
	Net Income Common Stockholders
-36.42M	-43.20M	-30.19M	-39.21M	-35.60M	-32.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.04M	18.46M	60.58M	71.88M	96.34M	50.84M
	Total Assets
0.00	140.90M	115.83M	116.88M	141.22M	78.66M
	Total Debt
0.00	27.48M	62.47M	39.74M	39.54M	38.34M
	Net Debt
17.04M	9.02M	2.80M	-30.59M	-54.60M	-10.62M
	Total Liabilities
0.00	109.10M	81.64M	59.82M	56.05M	53.16M
	Stockholders Equity
-4.35M	27.71M	34.19M	57.06M	85.17M	25.49M
Cash Flow		Free Cash Flow
-22.52M	-32.46M	-34.41M	-34.01M	-30.34M	-29.12M
	Operating Cash Flow
-20.27M	-31.00M	-32.04M	-30.74M	-27.98M	-28.39M
	Investing Cash Flow
-600.00K	-2.41M	-1.32M	6.73M	-9.84M	-730.00K
	Financing Cash Flow
5.89M	-6.81M	22.70M	207.00K	83.01M	2.37M

Neuronetics Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.77
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STIM, the sentiment is Neutral. The current price of 3.77 is below the 20-day moving average (MA) of 4.17, below the 50-day MA of 4.19, and above the 200-day MA of 2.03, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 41.37 is Neutral, neither overbought nor oversold. The STOCH value of 14.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STIM.

Neuronetics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PODD	76 Outperform	$18.59B	45.73	43.03%	―	22.07%	101.95%
TNDM	56 Neutral	$1.17B	―	-33.30%	―	25.74%	57.18%
LIVN	56 Neutral	$1.94B	29.73	4.87%	―	8.33%	256.54%
STAA	51 Neutral	$782.79M	55.81	-5.16%	―	-2.64%	-193.31%
Sector *	48 Neutral	$6.36B	1.28	-45.04%	2.64%	19.24%	1.69%
STIM	43 Neutral	$268.52M	―	-139.60%	―	4.96%	-29.29%
NVCR	43 Neutral	$1.86B	―	-46.67%	―	18.82%	19.76%

Neuronetics Corporate Events

Neuronetics Reports Q4 2024 Results and Strategic Moves

On March 4, 2025, Neuronetics announced its financial and operating results for the fourth quarter and full year of 2024, highlighting significant developments including the acquisition of Greenbrook TMS on December 9, 2024, and a revenue increase of 11% in the fourth quarter compared to the previous year. The company also reported a full-year revenue of $74.9 million, a 5% increase from 2023, and received FDA clearance for adolescent treatments. Neuronetics completed a secondary offering raising $18.9 million in February 2025 and executed actions to achieve $21 million in annualized cost synergies from the Greenbrook acquisition. Despite a decrease in gross margin due to the inclusion of Greenbrook’s clinic business, Neuronetics is positioned as a leader in TMS therapy, aiming for double-digit revenue growth and cash flow positivity by Q3 2025.

Neuronetics Approves Cash Incentives for Key Executives

On February 24, 2025, Neuronetics, Inc.’s Board of Directors approved annual cash incentive compensation awards for key executives, including Stephen Furlong, W. Andrew Macan, and Keith J. Sullivan, with awards amounting to $100,794, $97,313, and $169,260, respectively. These awards, set to be paid on or about March 6, 2025, reflect the company’s commitment to rewarding its leadership, potentially impacting its operational focus and stakeholder confidence.

Neuronetics Projects Growth Following Greenbrook Acquisition

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.