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3 Reasons to Retain Nevro (NVRO) Stock in Your Portfolio
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Nevro Corp. (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of its solid foothold in the Spinal Cord Stimulation (SCS) market. A solid second-quarter 2022 performance, along with 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 Zacks Rank #3 (Hold) stock has lost 68.4% compared with the 33.9% decline of the industry and 18% fall of the S&P 500.
This renowned global medical device company has a market capitalization of $1.29 billion. The company projects 23.1% growth for 2022 and expects to maintain its strong performance. Nevro’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same in one and broke even in the other, the average earnings surprise being 5.7%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Foothold in SCS Market: Nevro’s foothold in the global SCS therapy business raises our optimism about the stock. This month, the company announced that the FDA had approved its manufacturing operations in Costa Rica for the production of its proprietary SCS systems for treating chronic pain, including its HFX product platform.
The same month, Nevro announced that its HFX 10 kHz Therapy is the only form of SCS therapy to be referenced by the American Association of Clinical Endocrinology in its 2022 Diabetes Clinical Practice Guideline to treat painful diabetic neuropathy (PDN).
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 and SENZA-NSRBP (non-surgical refractory back pain) RCTs, Nevro believes the 10 kHz therapy can be an attractive treatment option for patients. Due to the removal of paresthesia, the company believes that the 10 kHz therapy can also be effective for patients with chronic upper limb and neck pain.
Strong Q2 Results: Nevro’s better-than-expected second-quarter 2022 earnings buoy optimism. The company recorded an improvement in overall top line and robust domestic revenues. The uptick in total U.S. permanent implant procedures and U.S. trial procedures, along with sequential improvement in U.S. PDN trial procedures, were also seen. The expansion of the gross margin also bodes well.
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 SCS 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 is witnessing a flat estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its loss per share has remained constant at $2.90.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $99.3 million, suggesting a 6.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Globus Medical, Inc. (GMED - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 7.9% compared with the industry’s 36.6% decline in the past year.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.2%. GMED’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 2.1%.
Globus Medical has lost 23.5% compared with the industry’s 33.9% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 73.6% against the industry’s 16% decline over the past year.
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3 Reasons to Retain Nevro (NVRO) Stock in Your Portfolio
Nevro Corp. (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of its solid foothold in the Spinal Cord Stimulation (SCS) market. A solid second-quarter 2022 performance, along with 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 Zacks Rank #3 (Hold) stock has lost 68.4% compared with the 33.9% decline of the industry and 18% fall of the S&P 500.
This renowned global medical device company has a market capitalization of $1.29 billion. The company projects 23.1% growth for 2022 and expects to maintain its strong performance. Nevro’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same in one and broke even in the other, the average earnings surprise being 5.7%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Foothold in SCS Market: Nevro’s foothold in the global SCS therapy business raises our optimism about the stock. This month, the company announced that the FDA had approved its manufacturing operations in Costa Rica for the production of its proprietary SCS systems for treating chronic pain, including its HFX product platform.
The same month, Nevro announced that its HFX 10 kHz Therapy is the only form of SCS therapy to be referenced by the American Association of Clinical Endocrinology in its 2022 Diabetes Clinical Practice Guideline to treat painful diabetic neuropathy (PDN).
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 and SENZA-NSRBP (non-surgical refractory back pain) RCTs, Nevro believes the 10 kHz therapy can be an attractive treatment option for patients. Due to the removal of paresthesia, the company believes that the 10 kHz therapy can also be effective for patients with chronic upper limb and neck pain.
Strong Q2 Results: Nevro’s better-than-expected second-quarter 2022 earnings buoy optimism. The company recorded an improvement in overall top line and robust domestic revenues. The uptick in total U.S. permanent implant procedures and U.S. trial procedures, along with sequential improvement in U.S. PDN trial procedures, were also seen. The expansion of the gross margin also bodes well.
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 SCS 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 is witnessing a flat estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its loss per share has remained constant at $2.90.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $99.3 million, suggesting a 6.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Globus Medical, Inc. (GMED - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has lost 7.9% compared with the industry’s 36.6% decline in the past year.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.2%. GMED’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 2.1%.
Globus Medical has lost 23.5% compared with the industry’s 33.9% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 73.6% against the industry’s 16% decline over the past year.