BTIG initiated coverage of Neuronetics Inc. (NASDAQ:STIM) on Monday, noting that the company is entering a pivotal new phase as the psilocybin opportunity takes center stage.
Following the analyst initiation, Neuronetics shares surged over 28% on Monday.
Greenbrook Acquisition Reshaped Business
The 2024 acquisition of Greenbrook TMS transformed the company from a pure-play medical device manufacturer into a vertically integrated mental health platform.
The deal added Transcranial Magnetic Stimulation (TMS) for mood regulation and Spravato, an FDA-cleared, noninvasive therapy for major depressive disorder (MDD) and other mental health disorders, to the company’s kitty.
Before the deal, Neuronetics offered NeuroStar, a non-drug, noninvasive treatment for MDD.
The platform positions STIM to benefit from what could be one of the most significant shifts in mental health treatment in a generation.
Strong Financial Performance Supports Outlook
The company reported a first-quarter loss of 16 cents versus a consensus loss of 17 cents. Sales rose to $34.454 million, topping the consensus estimate of $34.183 million. The growth reflected contributions from the Greenbrook acquisition and continued expansion of the SPRAVATO program.
While execution and reimbursement risks remain, BTIG sees an attractive risk/reward at current levels.
Analyst Sam Eiber initiated coverage with a Buy rating and set a $5 price forecast. The forecast is based on 2.5 times BTIG’s estimated sales over the next 12 to 24 months.
BTIG said the valuation reflects the company’s market-leading TMS franchise and its position in the emerging psychedelic therapy market.
Partnership Could Unlock Psilocybin Opportunity
Compass Pathways Plc (NASDAQ:CMPS) recently said its COMP360 psilocybin therapy for treatment-resistant depression (TRD) met the primary endpoint in both Phase 3 trials. The company plans to file its FDA application in the fourth quarter of 2026. If approved, it expects a commercial launch in the first half of 2027.
Neuronetics already has a collaboration agreement with Compass. The company has also shown it can integrate and deliver novel interventional therapies through its SPRAVATO (esketamine) program.
In May, Neuronetics partnered with ANT Neuro to expand the NeuroStar Advanced Therapy System. The partnership adds advanced image-guided navigation technology to improve the platform’s capabilities.
STIM Stock Price Activity: Neuronetics shares were up 28.40% at $2.08 at the time of publication on Monday, according to Benzinga Pro data.
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