While private equity firms own 38% of Neuronetics, Inc. (NASDAQ:STIM), retail investors are its largest shareholders with 43% ownership

editorial-team@simplywallst.com (Simply Wall St)

Sun, Mar 23, 2025, 7:13 AM 4 min read

Every investor in Neuronetics, Inc. (NASDAQ:STIM) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, private equity firms make up 38% of the company’s shareholders.

Let's delve deeper into each type of owner of Neuronetics, beginning with the chart below.

Check out our latest analysis for Neuronetics

ownership-breakdown — NasdaqGM:STIM Ownership Breakdown March 23rd 2025

What Does The Institutional Ownership Tell Us About Neuronetics?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Neuronetics does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Neuronetics, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — NasdaqGM:STIM Earnings and Revenue Growth March 23rd 2025

Hedge funds don't have many shares in Neuronetics. The company's largest shareholder is Madryn Asset Management, LP, with ownership of 38%. In comparison, the second and third largest shareholders hold about 2.4% and 2.3% of the stock. Furthermore, CEO Keith Sullivan is the owner of 1.5% of the company's shares.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Neuronetics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Neuronetics, Inc.. It has a market capitalization of just US$309m, and insiders have US$21m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With an ownership of 38%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for Neuronetics (2 are a bit unpleasant) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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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.