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3 Reasons to Retain Nevro (NVRO) in Your Portfolio for Now
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Nevro Corp. (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of its research and development (R&D) edge. The optimism, led by a solid third-quarter 2023 performance and continued strength in its flagship Senza platform, is expected to contribute further. However, stiff competition and dependence on third-party payors persist.
Over the past year, this currently Zacks Rank #3 (Hold) company has lost 45.3% against the industry’s 4.9% growth. The S&P 500 grew 25.5% in the same time frame.
The renowned global medical device company has a market capitalization of $778.4 million. The company projects 16.6% growth for 2024 and expects to maintain its strong performance going forward. Nevro’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 2.87%.
Image Source: Zacks Investment Research
Let’s delve deeper.
R&D Edge: Nevro aims to continue to improve patient outcomes and expand patient access to HF10 therapy through enhancements to Senza and the development of newer indications, raising our optimism. Since the launch of the initial Senza system, the company introduced a number of product enhancements, like active anchors with improved performance, among others. NVRO continues to make enhancements to Senza to boost its performance.
On its earnings call in November, management confirmed that the HFX iQ and its ability to deliver personalized pain relief continue to receive positive feedback.
Strength in Senza: We are optimistic about Nevro’s continued strength in its flagship Senza platform. Based on analysis from the company’s SENZA- Randomized Controlled Trial (RCT) and European studies, as well as the SENZA-PDN (Painful Diabetic Neuropathy) and SENZA-NSRBP (non-surgical refractory back pain) RCTs, Nevro believes the 10 kHz therapy can be an attractive treatment option for patients.
In November, Nevro published 24-month data from the SENZA Nonsurgical Refractory Back Pain (NSRBP) multicenter randomized controlled trial (RCT) in the Journal of Neurosurgery: Spine. The published 24-month data indicated that patients in the high-frequency SCS group experienced significant improvements in pain, function and quality of life, along with reduced opioid use, unlike the CMM arm at 24 months. The long-term data also provides evidence of the benefits of high-frequency SCS in managing patients with NSRBP.
Strong Q3 Results:Nevro’s better-than-expected third-quarter 2023 results buoy optimism. Robust domestic revenues were also impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures was promising. The improvement in U.S. PDN trial procedures was also encouraging.
Downsides
Dependence on Third-Party Payors: Nevro’s success in marketing its products largely depends on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of its products. Access to adequate coverage and reimbursement for spinal cord stimulation procedures using Senza by third-party payors is essential for the acceptance of Nevro’s products by its customers.
Stiff Competition: Nevro operates in a highly competitive medical device industry, which is subject to technological change. The company’s success depends partly upon its ability to establish a competitive position in the neuromodulation market by securing broad market acceptance of its HF10 therapy and Senza products for the treatment of approved chronic pain conditions.
Estimate Trend
Nevro has been witnessing a negative estimate revision trend for 2023. Over the past 60 days, the Zacks Consensus Estimate for its loss has narrowed from $2.94 per share to $2.79.
The Zacks Consensus Estimate for the company’s fourth-quarter 2023 revenues is pegged at $109.4 million, indicating a 3.9% decline from the year-ago quarter’s reported number.
ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%. The company’s shares have risen 42.5% year to date compared with the industry’s 1.7% growth.
HealthEquity, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 26.8%. HQY’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 16.5%.
The company’s shares have rallied 15% year to date against the industry’s 9.9% decline.
Biodesix, carrying a Zacks Rank #2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.76%.
The stock has fallen 30.9% year to date compared with the industry’s 9.9% decline.
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3 Reasons to Retain Nevro (NVRO) in Your Portfolio for Now
Nevro Corp. (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of its research and development (R&D) edge. The optimism, led by a solid third-quarter 2023 performance and continued strength in its flagship Senza platform, is expected to contribute further. However, stiff competition and dependence on third-party payors persist.
Over the past year, this currently Zacks Rank #3 (Hold) company has lost 45.3% against the industry’s 4.9% growth. The S&P 500 grew 25.5% in the same time frame.
The renowned global medical device company has a market capitalization of $778.4 million. The company projects 16.6% growth for 2024 and expects to maintain its strong performance going forward. Nevro’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 2.87%.
Image Source: Zacks Investment Research
Let’s delve deeper.
R&D Edge: Nevro aims to continue to improve patient outcomes and expand patient access to HF10 therapy through enhancements to Senza and the development of newer indications, raising our optimism. Since the launch of the initial Senza system, the company introduced a number of product enhancements, like active anchors with improved performance, among others. NVRO continues to make enhancements to Senza to boost its performance.
On its earnings call in November, management confirmed that the HFX iQ and its ability to deliver personalized pain relief continue to receive positive feedback.
Strength in Senza: We are optimistic about Nevro’s continued strength in its flagship Senza platform. Based on analysis from the company’s SENZA- Randomized Controlled Trial (RCT) and European studies, as well as the SENZA-PDN (Painful Diabetic Neuropathy) and SENZA-NSRBP (non-surgical refractory back pain) RCTs, Nevro believes the 10 kHz therapy can be an attractive treatment option for patients.
In November, Nevro published 24-month data from the SENZA Nonsurgical Refractory Back Pain (NSRBP) multicenter randomized controlled trial (RCT) in the Journal of Neurosurgery: Spine. The published 24-month data indicated that patients in the high-frequency SCS group experienced significant improvements in pain, function and quality of life, along with reduced opioid use, unlike the CMM arm at 24 months. The long-term data also provides evidence of the benefits of high-frequency SCS in managing patients with NSRBP.
Strong Q3 Results:Nevro’s better-than-expected third-quarter 2023 results buoy optimism. Robust domestic revenues were also impressive. An uptick in total U.S. permanent implant procedures and U.S. trial procedures was promising. The improvement in U.S. PDN trial procedures was also encouraging.
Downsides
Dependence on Third-Party Payors: Nevro’s success in marketing its products largely depends on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of its products. Access to adequate coverage and reimbursement for spinal cord stimulation procedures using Senza by third-party payors is essential for the acceptance of Nevro’s products by its customers.
Stiff Competition: Nevro operates in a highly competitive medical device industry, which is subject to technological change. The company’s success depends partly upon its ability to establish a competitive position in the neuromodulation market by securing broad market acceptance of its HF10 therapy and Senza products for the treatment of approved chronic pain conditions.
Estimate Trend
Nevro has been witnessing a negative estimate revision trend for 2023. Over the past 60 days, the Zacks Consensus Estimate for its loss has narrowed from $2.94 per share to $2.79.
The Zacks Consensus Estimate for the company’s fourth-quarter 2023 revenues is pegged at $109.4 million, indicating a 3.9% decline from the year-ago quarter’s reported number.
Nevro Corp. Price
Nevro Corp. price | Nevro Corp. Quote
Key Picks
Some better-ranked stocks from the broader medical space are Integer Holdings (ITGR - Free Report) , HealthEquity, Inc. (HQY - Free Report) and Biodesix (BDSX - Free Report) .
Integer Holdings, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 33.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%. The company’s shares have risen 42.5% year to date compared with the industry’s 1.7% growth.
HealthEquity, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 26.8%. HQY’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 16.5%.
The company’s shares have rallied 15% year to date against the industry’s 9.9% decline.
Biodesix, carrying a Zacks Rank #2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.76%.
The stock has fallen 30.9% year to date compared with the industry’s 9.9% decline.