Neuronetics, Inc. (NASDAQ:STIM) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for Neuronetics, Inc. (NASDAQ:STIM) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.3% to US$4.65. Neuronetics beat revenue forecasts by a solid 10%, hitting US$32m. Statutory losses also blew out, with the loss per share reaching US$0.21, some 68% bigger than the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

After the latest results, the four analysts covering Neuronetics are now predicting revenues of US$150.3m in 2025. If met, this would reflect a sizeable 68% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 52% to US$0.35. Before this earnings announcement, the analysts had been modelling revenues of US$148.6m and losses of US$0.32 per share in 2025. While this year's revenue estimates held steady, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

See our latest analysis for Neuronetics

Although the analysts are now forecasting higher losses, the average price target rose 105% to 3.33333, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Neuronetics at US$8.00 per share, while the most bearish prices it at US$5.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Neuronetics' rate of growth is expected to accelerate meaningfully, with the forecast 100% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Neuronetics to grow faster than the wider 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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.

Before you take the next step you should know about the 5 warning signs for Neuronetics (3 are significant!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.