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Here's Why You Should Retain Nevro (NVRO) Stock 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.
In the past year, this Zacks Rank #3 (Hold) stock has lost 53.5% against the industry’s 11.6% growth. The S&P 500 rallied 31.4% in the same time frame.
The renowned global medical device company has a market capitalization of $505.2 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 three of the trailing four quarters and missed once, the average surprise being 22.92%.
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 several product enhancements, like active anchors with improved performance, among others. NVRO continues to make enhancements to Senza to boost its performance.
In the earnings call in February, management shared its observation regarding the increased adoption of HFX iQ since its full market launch. HFX iQ represented 53% of the company’s permanent implant procedures in the fourth- quarter of 2023 and the adoption is likely to grow throughout 2024.
Strength in Senza: We are optimistic about Nevro’s continued strength in its flagship Senza platform. Based on the analysis from the company’s SENZA- Randomized Controlled Trial (RCT) and European studies and 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 Q4 Results: Nevro delivered better than expected fourth-quarter 2023 results, which buoy optimism. Robust domestic and worldwide revenues were worth tracking. A rise in total U.S. permanent implant procedures was impressive. U.S. trial procedures were observed to be in line with the company’s expectations. The improvement in U.S. PDN trial procedures was also encouraging.
In the fourth-quarter earnings call, the management informed about the acquisition of Vyrsa Technologies, which is likely to provide Nevro an entry into the very high growth sacroiliac joint fusion market and announced a debt refinancing.
Downsides
Dependence on Third-Party Payors: Nevro's ability to successfully sell its goods is primarily dependent on how well private health insurers, government health administrative agencies in the US and other countries, and other organizations can pay for and reimburse customers for the costs of Nevro's products. It is imperative that third-party payors provide sufficient coverage and payment for spinal cord stimulation operations utilizing Senza for Nevro's consumers to accept its products.
Stiff Competition: Nevro operates in a highly-competitive medical device industry, which is subject to technological change. The company's capacity to gain a competitive edge in the neuromodulation market by gaining widespread consumer approval of its Senza and HF10 therapies for the management of recognized chronic pain syndromes is one factor contributing to its success.
Estimate Trend
Nevro has been witnessing a negative estimate revision trend for 2023. In 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 first-quarter 2024 revenues is pegged at $98.4 million, indicating a 2.1% rise from the year-ago quarter’s reported number.
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora, Inc. (COR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 58.3% compared with the industry’s 18.9% rise in the past year.
Cardinal Health, flaunting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 14.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average being 15.6%.
Cardinal Health has surged 51.9% compared with the industry’s 3.2% rise in the past year.
Cencora, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.7%.
Cencora’s shares have rallied 51.5% compared with the industry’s 3.6% rise in the past year.
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Here's Why You Should Retain Nevro (NVRO) Stock 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.
In the past year, this Zacks Rank #3 (Hold) stock has lost 53.5% against the industry’s 11.6% growth. The S&P 500 rallied 31.4% in the same time frame.
The renowned global medical device company has a market capitalization of $505.2 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 three of the trailing four quarters and missed once, the average surprise being 22.92%.
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 several product enhancements, like active anchors with improved performance, among others. NVRO continues to make enhancements to Senza to boost its performance.
In the earnings call in February, management shared its observation regarding the increased adoption of HFX iQ since its full market launch. HFX iQ represented 53% of the company’s permanent implant procedures in the fourth- quarter of 2023 and the adoption is likely to grow throughout 2024.
Strength in Senza: We are optimistic about Nevro’s continued strength in its flagship Senza platform. Based on the analysis from the company’s SENZA- Randomized Controlled Trial (RCT) and European studies and 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 Q4 Results: Nevro delivered better than expected fourth-quarter 2023 results, which buoy optimism. Robust domestic and worldwide revenues were worth tracking. A rise in total U.S. permanent implant procedures was impressive. U.S. trial procedures were observed to be in line with the company’s expectations. The improvement in U.S. PDN trial procedures was also encouraging.
In the fourth-quarter earnings call, the management informed about the acquisition of Vyrsa Technologies, which is likely to provide Nevro an entry into the very high growth sacroiliac joint fusion market and announced a debt refinancing.
Downsides
Dependence on Third-Party Payors: Nevro's ability to successfully sell its goods is primarily dependent on how well private health insurers, government health administrative agencies in the US and other countries, and other organizations can pay for and reimburse customers for the costs of Nevro's products. It is imperative that third-party payors provide sufficient coverage and payment for spinal cord stimulation operations utilizing Senza for Nevro's consumers to accept its products.
Stiff Competition: Nevro operates in a highly-competitive medical device industry, which is subject to technological change. The company's capacity to gain a competitive edge in the neuromodulation market by gaining widespread consumer approval of its Senza and HF10 therapies for the management of recognized chronic pain syndromes is one factor contributing to its success.
Estimate Trend
Nevro has been witnessing a negative estimate revision trend for 2023. In 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 first-quarter 2024 revenues is pegged at $98.4 million, indicating a 2.1% rise from the year-ago quarter’s reported number.
Nevro Corp. Price
Nevro Corp. price | Nevro Corp. Quote
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora, Inc. (COR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 58.3% compared with the industry’s 18.9% rise in the past year.
Cardinal Health, flaunting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 14.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average being 15.6%.
Cardinal Health has surged 51.9% compared with the industry’s 3.2% rise in the past year.
Cencora, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.7%.
Cencora’s shares have rallied 51.5% compared with the industry’s 3.6% rise in the past year.