We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why you Should Retain Nevro Stock in Your Portfolio Now
Read MoreHide Full Article
Nevro (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of strength in Senza and diversification plans regarding product portfolio. The optimism, led by a decent second-quarter 2024 performance and continued focus on research and development activities, is expected to contribute further. However, concerns regarding softness in the spinal cord stimulation (SCS) market and dependence on third-party payers persist.
This Zacks Rank #3 (Hold) company’s shares have lost 74.9% in the year-to-date period against the industry’s 7.6% growth. The S&P 500 has increased 20% in the said time frame.
The renowned global medical device company has a market capitalization of $214.01 million. The company projects 18.6% growth over the next five years. Nevro’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.75%.
Image Source: Zacks Investment Research
Reasons Favoring NVRO’s Growth
Strength in Senza: We are upbeat about Nevro's sustained strength in its main Senza platform. The company believes that the 10 kHz therapy can be a desirable course of treatment for patients based on the 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.
The company announced 24 months of data from Nevro’s SENZA-PDN RCT during the first quarter. This demonstrated an improvement in sensory function that can lower the risk of diabetes-related ulcerations and traumatic amputations for patients suffering from severe side effects of diabetes.
Diversified Product Portfolio to Accelerate Growth: Nevro is strategizing to enter and build its business in more diverse markets, serving patients earlier in the care continuum, which is likely to position the company to realize sustainable growth, a faster path to profitability and value creation. A diversified portfolio will also help the company to offset softness in the SCS market lately as newer treatment therapies have emerged earlier in the care continuum.
In December 2023, Nevro acquired Vyrsa Technologies (Vyrsa), a privately-held medical technology company focused on a minimally invasive treatment option for patients suffering from chronic sacroiliac joint (SI Joint) pain. The global SI Joint fusion market size was valued at $721.2 million in 2023 and is projected to witness a CAGR of 19.8% between 2024 and 2030. The acquisition is expected to strengthen Nevro’s foothold in the SI joint treatment space and generate additional revenues.
R&D Edge: Nevro aims to continue to improve patient outcomes and further expand patient access to 10 kHz Therapy through enhancements to Senza and the development of new indications. Since the launch of the initial Senza system, the company has introduced numerous product enhancements. In the second quarter of 2024, R&D expenses increased 6% year over year to $14.1 million.
Factors That May Offset the Gains for NVRO
Weakness in SCS Market: Even though the SCS market continues to provide opportunity and remain underpenetrated, Nevro is witnessing softness in this market lately as newer treatment therapies have emerged earlier in the care continuum ahead of SCS therapy and are causing delays in patients receiving SCS therapy. The SCS market has seen increased competition, driven mainly by new product launches over the past year by NVRO’s larger competitors.
NVRO believes that the newer therapies are, in some cases, delaying patients from getting SCS therapy, as well as competing for its customers' time and operating room schedules. These newer procedures, such as SI joint fusion, offer physicians who treat patients suffering from multiple causes of chronic pain more tools than ever before to treat their patients’ pain and, in some cases, their underlying functional etiologies.
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 to the acceptance of Nevro’s products by its customers.
A significant number of negative coverage and reimbursement decisions by private insurers may impair the company’s ability or delay its ability to grow its revenues.
Estimate Trend
Nevro has been witnessing a stable estimate revision trend for 2024. In the past seven days, the Zacks Consensus Estimate for its loss per share has remained stable at $2.69.
The Zacks Consensus Estimate for the company’s third-quarter 2024 revenues is pegged at $93.1 million, indicating a 10.4% decline from the year-ago quarter’s reported number.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 56.1% so far this year compared with the industry's 48.1% rise.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why you Should Retain Nevro Stock in Your Portfolio Now
Nevro (NVRO - Free Report) is well-poised for growth in the coming quarters, courtesy of strength in Senza and diversification plans regarding product portfolio. The optimism, led by a decent second-quarter 2024 performance and continued focus on research and development activities, is expected to contribute further. However, concerns regarding softness in the spinal cord stimulation (SCS) market and dependence on third-party payers persist.
This Zacks Rank #3 (Hold) company’s shares have lost 74.9% in the year-to-date period against the industry’s 7.6% growth. The S&P 500 has increased 20% in the said time frame.
The renowned global medical device company has a market capitalization of $214.01 million. The company projects 18.6% growth over the next five years. Nevro’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.75%.
Image Source: Zacks Investment Research
Reasons Favoring NVRO’s Growth
Strength in Senza: We are upbeat about Nevro's sustained strength in its main Senza platform. The company believes that the 10 kHz therapy can be a desirable course of treatment for patients based on the 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.
The company announced 24 months of data from Nevro’s SENZA-PDN RCT during the first quarter. This demonstrated an improvement in sensory function that can lower the risk of diabetes-related ulcerations and traumatic amputations for patients suffering from severe side effects of diabetes.
Diversified Product Portfolio to Accelerate Growth: Nevro is strategizing to enter and build its business in more diverse markets, serving patients earlier in the care continuum, which is likely to position the company to realize sustainable growth, a faster path to profitability and value creation. A diversified portfolio will also help the company to offset softness in the SCS market lately as newer treatment therapies have emerged earlier in the care continuum.
In December 2023, Nevro acquired Vyrsa Technologies (Vyrsa), a privately-held medical technology company focused on a minimally invasive treatment option for patients suffering from chronic sacroiliac joint (SI Joint) pain. The global SI Joint fusion market size was valued at $721.2 million in 2023 and is projected to witness a CAGR of 19.8% between 2024 and 2030. The acquisition is expected to strengthen Nevro’s foothold in the SI joint treatment space and generate additional revenues.
R&D Edge: Nevro aims to continue to improve patient outcomes and further expand patient access to 10 kHz Therapy through enhancements to Senza and the development of new indications. Since the launch of the initial Senza system, the company has introduced numerous product enhancements. In the second quarter of 2024, R&D expenses increased 6% year over year to $14.1 million.
Factors That May Offset the Gains for NVRO
Weakness in SCS Market: Even though the SCS market continues to provide opportunity and remain underpenetrated, Nevro is witnessing softness in this market lately as newer treatment therapies have emerged earlier in the care continuum ahead of SCS therapy and are causing delays in patients receiving SCS therapy. The SCS market has seen increased competition, driven mainly by new product launches over the past year by NVRO’s larger competitors.
NVRO believes that the newer therapies are, in some cases, delaying patients from getting SCS therapy, as well as competing for its customers' time and operating room schedules. These newer procedures, such as SI joint fusion, offer physicians who treat patients suffering from multiple causes of chronic pain more tools than ever before to treat their patients’ pain and, in some cases, their underlying functional etiologies.
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 to the acceptance of Nevro’s products by its customers.
A significant number of negative coverage and reimbursement decisions by private insurers may impair the company’s ability or delay its ability to grow its revenues.
Estimate Trend
Nevro has been witnessing a stable estimate revision trend for 2024. In the past seven days, the Zacks Consensus Estimate for its loss per share has remained stable at $2.69.
The Zacks Consensus Estimate for the company’s third-quarter 2024 revenues is pegged at $93.1 million, indicating a 10.4% decline from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 56.1% so far this year compared with the industry's 48.1% rise.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.