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It's shaping up to be a tough period for Neuronetics, Inc. (NASDAQ:STIM), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$19m, but statutory earnings fell catastrophically short, with a loss of US$0.44 some 91% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Neuronetics after the latest results.
Check out our latest analysis for Neuronetics
After the latest results, the four analysts covering Neuronetics are now predicting revenues of US$77.0m in 2025. If met, this would reflect a satisfactory 5.9% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to US$0.63. Before this earnings announcement, the analysts had been modelling revenues of US$87.4m and losses of US$0.63 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
The average price target fell 20% to US$2.67, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing 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. Currently, the most bullish analyst values Neuronetics at US$3.00 per share, while the most bearish prices it at US$2.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Neuronetics shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neuronetics' past performance and to peers in the same industry. We would highlight that Neuronetics' revenue growth is expected to slow, with the forecast 4.7% annualised growth rate until the end of 2025 being well below the historical 6.2% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Neuronetics.