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Neuronetics (STIM) Soars 6.5%: Is Further Upside Left in the Stock?

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Neuronetics (STIM - Free Report) shares soared 6.5% in the last trading session to close at $16.54. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.5% loss over the past four weeks.

Neuronetics made a big jump just on the eve of its fourth quarter and full-year 2020 earnings release with the latest Wall Street analysts forecasts showing significant tapering of loss compared to the year-ago period. The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of 25 cents per share, much narrower than the year-ago loss of 41 cents. The full-year loss of $1.51 per share indicates a 4.4% improvement from the year-ago figure. The stock in slated for a before-market release of its fourth-quarter earnings on Mar 2.

Price and Consensus

Price Consensus Chart for Neuronetics

This medical device company focused on psychiatric disorders is expected to post quarterly loss of $0.25 per share in its upcoming report, which represents a year-over-year change of +39%. Revenues are expected to be $15.21 million, down 12.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Neuronetics, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on STIM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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