On Wednesday, Piper Sandler adjusted its outlook on Nevro Corp (NYSE:NVRO), a company specializing in medical devices for chronic pain relief. The firm reduced the stock price target to $12.00 from the previous $15.00 but maintained an Underweight rating on the shares.
Nevro reported first-quarter revenues of $101.9 million, which slightly exceeded the consensus estimates. The performance was attributed in part to pricing benefits and a number of replacement spinal cord stimulation (SCS) procedures. Despite the positive revenue outcome, the company's guidance for the second quarter was set at $106-108 million, falling short of the $111.6 million expected by analysts.
The management team at Nevro reaffirmed its full-year 2024 revenue guidance, projecting between $435 million and $445 million, representing a year-over-year growth of 2-5%, excluding foreign exchange impacts. Additionally, the company revised its adjusted EBITDA forecast, now anticipating a range from a $5 million loss to a $2 million profit.
The financial firm expressed concerns regarding the clarity of Nevro's guidance and the overall health of its SCS franchise. Citing these uncertainties and the company's long road to achieving net income profitability, the firm decided to maintain its Underweight rating while adjusting the stock price target.
The new stock price target of $12 reflects the firm's cautious stance on Nevro's stock, taking into account the company's current financial position and market prospects.
InvestingPro Insights
In light of Piper Sandler's revised outlook on Nevro Corp, InvestingPro data and tips offer additional insights. Nevro's market capitalization stands at approximately $422.94 million, and despite a challenging financial performance with a negative P/E ratio of -4.43 for the last twelve months as of Q4 2023, the company holds a strong gross profit margin of 68.22%. This suggests that while profitability remains elusive, Nevro has been effective in managing its cost of goods sold relative to revenue.
One of the key InvestingPro Tips highlights that Nevro has more cash than debt on its balance sheet, which could provide some financial flexibility in its operations. However, concerns are raised by the fact that analysts do not anticipate the company will be profitable this year, and Nevro is quickly burning through cash.
Moreover, while the company has seen a significant return over the last week with a 10.76% price total return, it has not been profitable over the last twelve months and does not pay a dividend to shareholders.
Investors interested in a deeper analysis of Nevro's financial health and future prospects can find more InvestingPro Tips at https://www.investing.com/pro/NVRO. There are 5 additional tips available to help guide investment decisions. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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