Here's What Analysts Are Forecasting For Neuronetics, Inc. (NASDAQ:STIM) After Its Second-Quarter Results

Last week, you might have seen that Neuronetics, Inc. (NASDAQ:STIM) released its second-quarter result to the market. The early response was not positive, with shares down 4.4% to US$4.25 in the past week. Revenues of US$38m beat expectations by a respectable 3.2%, although statutory losses per share increased. Neuronetics lost US$0.15, which was 96% more than what the analysts had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the most recent consensus for Neuronetics from three analysts is for revenues of US$151.0m in 2025. If met, it would imply a substantial 36% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to US$0.57. Before this earnings announcement, the analysts had been modelling revenues of US$151.0m and losses of US$0.36 per share in 2025. So it's pretty clear the analysts have mixed opinions on Neuronetics even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.

See our latest analysis for Neuronetics

As a result, there was no major change to the consensus price target of US$6.50, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Neuronetics, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$5.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Neuronetics is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Neuronetics' rate of growth is expected to accelerate meaningfully, with the forecast 85% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Neuronetics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Neuronetics. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Neuronetics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Neuronetics analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Neuronetics you should be aware of, and 1 of them is a bit concerning.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.