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Neuronetics (STIM) Q2 Loss Wider Than Expected, Revenues Fall Y/Y
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Neuronetics (STIM - Free Report) reported a net loss of 33 cents per share in second-quarter 2024, wider than the year-ago quarter’s reported loss of 17 cents. The figure also lagged the Zacks Consensus Estimate of a loss of 27 cents per share.
Q2 Revenues
Consolidated revenues amounted to $16.5 million, down 6.3% from $17.6 million recorded in the second quarter of 2023. The figure missed the Zacks Consensus Estimate by 12.2%.
Segments in Detail
Neuronetics reports under two primary markets, based on the geographic location to which its products are shipped.
Total U.S. revenues were $16.1 million, down 7% from the year-ago period’s level. The decrease in revenues was primarily due to a drop in U.S Treatment sessions and U.S NeuroStar Advanced Therapy System sales year over year.
U.S. NeuroStar Advanced Therapy System’s revenues for the quarter totaled $4 million, down 11% from $4.5 million reported in the second quarter of 2023. The U.S. treatment session revenues amounted to $11.7 million, down 5% from $12.3 million recorded in the comparable period of 2023.
Total International revenues were $320 million, which decreased a marginal 0.3% year over year.
Margins
The gross profit in the reported quarter was $12.2 million, down 4.7% year over year. The gross margin expanded 150 basis points (bps) to 74% due to an 11.7% decline in the cost of revenues.
Sales and marketing expenses rose 6.4% to $12.3 million. General and administrative expenses declined 0.8% to $6.1 million. R&D expenses moved down 5.5% to $2.2 million.
The company registered an adjusted operating loss of $8.5 million in the second quarter compared with a loss of $7.3 million in the year-ago period.
Financial Update
Neuronetics exited the second quarter with cash and cash equivalents of $42.6 million compared with $47.7 million at the end of the first quarter of 2024.
Guidance
Neuronetics expects total worldwide revenues to be in the range of $78-$80 million for full-year 2024. The Zacks Consensus Estimate for the same is pegged at $78.9 million.
Neuronetics, Inc. Price, Consensus and EPS Surprise
In the third quarter of 2024, the company expects total worldwide revenues to be in the $18.5-$19.5 million range.
Our Take
Neuronetics exited the second quarter with weaker-than-expected results, wherein both the top and bottom lines missed their respective Zacks Consensus Estimate. Revenues in both geographic segments declined year over year, reflecting a decrease in treatment session volume. However, reduced cost and the expansion of gross margin look encouraging. The company incurred a net loss in the quarter, raising our apprehension.
On a positive note, STIM achieved a milestone with more than 182,000 global patients having undergone 6.6 million treatment sessions in the quarter. The company also managed to secure a $50-million Initial Tranche of Debt Facility with Perceptive Advisors, reducing net debt by $10 million.
Zacks Rank and Key Picks
Neuronetics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , DaVita Inc. (DVA - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported second-quarter adjusted earnings per share (EPS) of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
DaVita, carrying a Zacks Rank #1, reported second-quarter 2024 adjusted earnings of $2.59, which surpassed the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion topped the Zacks Consensus Estimate by 0.7%.
DVA has a long-term earnings growth rate of 17.5% compared with the S&P 500’s 12.5%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.
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Neuronetics (STIM) Q2 Loss Wider Than Expected, Revenues Fall Y/Y
Neuronetics (STIM - Free Report) reported a net loss of 33 cents per share in second-quarter 2024, wider than the year-ago quarter’s reported loss of 17 cents. The figure also lagged the Zacks Consensus Estimate of a loss of 27 cents per share.
Q2 Revenues
Consolidated revenues amounted to $16.5 million, down 6.3% from $17.6 million recorded in the second quarter of 2023. The figure missed the Zacks Consensus Estimate by 12.2%.
Segments in Detail
Neuronetics reports under two primary markets, based on the geographic location to which its products are shipped.
Total U.S. revenues were $16.1 million, down 7% from the year-ago period’s level. The decrease in revenues was primarily due to a drop in U.S Treatment sessions and U.S NeuroStar Advanced Therapy System sales year over year.
U.S. NeuroStar Advanced Therapy System’s revenues for the quarter totaled $4 million, down 11% from $4.5 million reported in the second quarter of 2023. The U.S. treatment session revenues amounted to $11.7 million, down 5% from $12.3 million recorded in the comparable period of 2023.
Total International revenues were $320 million, which decreased a marginal 0.3% year over year.
Margins
The gross profit in the reported quarter was $12.2 million, down 4.7% year over year. The gross margin expanded 150 basis points (bps) to 74% due to an 11.7% decline in the cost of revenues.
Sales and marketing expenses rose 6.4% to $12.3 million. General and administrative expenses declined 0.8% to $6.1 million. R&D expenses moved down 5.5% to $2.2 million.
The company registered an adjusted operating loss of $8.5 million in the second quarter compared with a loss of $7.3 million in the year-ago period.
Financial Update
Neuronetics exited the second quarter with cash and cash equivalents of $42.6 million compared with $47.7 million at the end of the first quarter of 2024.
Guidance
Neuronetics expects total worldwide revenues to be in the range of $78-$80 million for full-year 2024. The Zacks Consensus Estimate for the same is pegged at $78.9 million.
Neuronetics, Inc. Price, Consensus and EPS Surprise
Neuronetics, Inc. price-consensus-eps-surprise-chart | Neuronetics, Inc. Quote
In the third quarter of 2024, the company expects total worldwide revenues to be in the $18.5-$19.5 million range.
Our Take
Neuronetics exited the second quarter with weaker-than-expected results, wherein both the top and bottom lines missed their respective Zacks Consensus Estimate. Revenues in both geographic segments declined year over year, reflecting a decrease in treatment session volume. However, reduced cost and the expansion of gross margin look encouraging. The company incurred a net loss in the quarter, raising our apprehension.
On a positive note, STIM achieved a milestone with more than 182,000 global patients having undergone 6.6 million treatment sessions in the quarter. The company also managed to secure a $50-million Initial Tranche of Debt Facility with Perceptive Advisors, reducing net debt by $10 million.
Zacks Rank and Key Picks
Neuronetics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , DaVita Inc. (DVA - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported second-quarter adjusted earnings per share (EPS) of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
DaVita, carrying a Zacks Rank #1, reported second-quarter 2024 adjusted earnings of $2.59, which surpassed the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion topped the Zacks Consensus Estimate by 0.7%.
DVA has a long-term earnings growth rate of 17.5% compared with the S&P 500’s 12.5%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.