Nevro NVRO is well-poised for growth in the coming quarters, courtesy of its business expansion plans and restructuring activities. The optimism, led by a decent preliminary full-year 2024 results, is expected to contribute further. However, concerns regarding softness in the spinal cord stimulation (SCS) market and dependence on third-party payers persist.
This Zacks Rank #3 (Hold) company’s shares have fallen 59.2% in the past year compared with the industry’s 7.4% decline. The S&P 500 has increased 7.9% in the same period.
The renowned global medical device company has a market capitalization of $221.8 million. It projects 10.4% growth in 2026. Nevro’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 29.98%.
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Reasons Favoring NVRO’s Growth
Market Expansion Into SI Joint Fusion: Nevro's expansion into the sacroiliac (SI) joint fusion market is a strategic move. Emerging treatment therapies targeting conditions earlier in the care continuum have been impacting demand for Nevro’s prized SCS portfolio. The company’s own SI offerings are solutions for the same segment. Therefore, they add to its revenue streams. Additionally, patients onboarding its platform earlier are more likely to continue using it as the treatment advances. As more patients stay on its platform for longer, the chances of realizing sustainable growth and a faster path to profitability increase. The global SI Joint fusion market size was valued at $721.2 million in 2023 and is expected to witness a CAGR of 19.8% between 2024 and 2030.
The acquisition of Vyrsa Technologies in December 2023 enabled Nevro to introduce a complementary line of products aimed at treating chronic pain caused by the SI joint. We remain optimistic about the company’s expansion into the SI joint fusion market with the Nevro1 device. We believe that it diversifies its revenue streams rather than cannibalizing the existing business. In November 2024, new data was published in Medical Devices: Evidence and Research, which demonstrates the superiority of the Nevro1 SI Joint Fusion System, a posterior-integrated transfixation cage system offering enhanced stability, minimized bone removal and increased fusion potential compared to a posterolateral cylindrical-threaded single-implant system.
Expansion of SCS Systems Into the PDN Market: Nevro’s focus on expanding into the painful diabetic neuropathy (PDN) market represents a significant growth opportunity, as this condition affects a large and growing patient population. PDN is a type of nerve damage caused by diabetes that leads to chronic pain, particularly in the feet and legs. With 10 kHz Therapy, Nevro’s SCS systems have shown promising clinical outcomes in reducing pain and improving quality of life for patients suffering from PDN. Per a report by Grand View Research, the global diabetic neuropathy treatment market size was estimated at $4.34 billion in 2023 and is projected to witness a CAGR of 7.72% from 2024 to 2030.
By targeting PDN, Nevro gets to tap into an underserved market with high unmet medical needs. With an aging population and rising diabetes rates globally, the potential patient pool for PDN treatment is vast, providing Nevro with a substantial market expansion opportunity.
Robust Q4 Results: Per management, full-year 2024 worldwide revenues are higher than the guidance provided in November 2024, primarily due to the impact of greater-than-anticipated SCS device replacement procedures in the fourth quarter of 2024. The company reallocated investments to its direct-to-consumer (DTC) advertising efforts in the third quarter of 2024 and has continued to witness patient interest and response as a result. NVRO anticipates that the benefit from DTC advertising will ramp throughout 2025, with a more meaningful impact in the second half of the year.
During the fourth quarter of 2024, Nevro published data highlighting the significant advantages of its SI Joint Fusion System (Nevro1), improving surgical outcomes and bolstering its market position in spinal procedures. The company also received CE Mark Certification in Europe for its HFX iQ SCS system, integrating AI technology to enhance competitiveness and drive global market expansion. Additionally, new data demonstrated the long-term effectiveness of its High-Frequency SCS therapy in reducing chronic pain, reinforcing Nevro's clinical leadership in pain management and supporting the adoption of its innovative treatments.
Factors That Can Offset the Gains for NVRO
Weakness in SCS Market: While the SCS market remains underpenetrated and full of opportunity, Nevro is facing softness in this space due to newer therapies emerging earlier in the care continuum, delaying patient adoption of SCS therapy. Increased competition, driven by product launches from larger competitors and the rise of alternatives like SI joint fusion, provides physicians with more options to address chronic pain, which, in turn, impacts Nevro’s operating room schedules and customer engagement.
Dependence on Third-Party Payors: Nevro’s success in marketing its products largely depends on whether U.S. and international government health administrative authorities, private health insurers, and other organizations adequately cover and reimburse customers for the costs of its products. Access to adequate coverage and reimbursement for SCS procedures using Senza by third-party payors is essential to customers' acceptance of Nevro’s products.
A significant number of negative coverage and reimbursement decisions by private insurers may impair or delay the company’s ability to grow revenues.
Nevro Corp. Price
Nevro Corp. Price
Nevro Corp. price | Nevro Corp. Quote
Estimate Trend
Nevro has been witnessing a negative estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its loss per share has expanded 16 cents to $2.67.
The Zacks Consensus Estimate for the company’s first-quarter 2025 revenues is pegged at $92.9 million, indicating an 8.9% decline from the year-ago quarter’s reported number. Loss per share is expected to be 90 cents, 20 cents wider than the year-ago loss.
Stocks to Consider
Some better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Aveanna Healthcare AVAH. At present, Masimo sports a Zacks Rank #1 (Strong Buy), while Boston Scientific and Cardinal Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo’s shares have gained 26.6% in the past year compared with the industry’s 7.4% growth. Estimates for MASI’s 2025 EPS have increased 11.9% to $5.27 in the past 30 days. MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.41%. In the last reported quarter, it posted an earnings surprise of 16.6%.
Estimates for Boston Scientific’s 2025 EPS have remained stable at $2.85 in the past 30 days. Shares of the company have surged 47.1% in the past year compared with the industry’s growth of 10%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%. In the last reported quarter, it delivered an earnings surprise of 7.69%.
Estimates for Aveanna Healthcare’s 2025 EPS have improved from 7 cents per share to 8 cents in the past 30 days. Shares of the company have gained 124.6% in the past year compared with the industry’s 5.2% growth. AVAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 135.00%. In the last reported quarter, it delivered an earnings surprise of 300.00%.
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