On Thursday, H.C. Wainwright adjusted its outlook on Brainsway (NASDAQ:BWAY) shares, increasing the price target to $15.00 from $13.00 while reiterating a Buy rating on the stock. This revision follows Brainsway's announcement last week of its first-quarter financial results for 2024.
The company reported a top-line revenue of $9.1 million in the first quarter, surpassing the analyst's projection of $8.4 million and marking a 37% increase compared to the same period in the previous year.
Notably, Brainsway achieved a $0.00 earnings per share in the first quarter, which was more favorable than the anticipated net loss of $0.02 per share.
In light of these results, H.C. Wainwright has updated its full-year revenue forecast for Brainsway, raising the 2024 estimate to $38.5 million from the prior $36.3 million. Similarly, the projection for 2025 has been increased to $43 million, up from the earlier prediction of $41.5 million.
The firm now expects Brainsway to report net earnings of $0.03 per share for both 2024 and 2025, in contrast to the previously forecasted net loss of $0.03 per share for 2024.
Brainsway's performance has been attributed to the robust sales growth of its proprietary Deep Transcranial Magnetic Stimulation (Deep TMS) technologies. These technologies are used in helmets designed for treating major depressive disorder (MDD), obsessive-compulsive disorder (OCD), and smoking cessation.
During the first quarter, the company shipped 57 new Deep TMS systems, expanding its installed base to a total of 1,158 systems. Additionally, 31 OCD coils were shipped as add-on helmets, enabling OCD treatment capabilities in half of the installed base.
H.C. Wainwright anticipates that Brainsway will continue to add approximately 60 new systems per quarter, potentially reaching an installed base of around 1,340 systems by the end of 2024.
The firm's confidence in Brainsway's potential for sustainable profitability and sequential sales growth underpins the decision to maintain a Buy rating and raise the 12-month price target, reflecting higher revenue forecasts and a slight increase in the valuation multiple from 4.7x to 5.1x within the comparable coverage universe.
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