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NeuroPace (NPCE)
NASDAQ:NPCE
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NeuroPace
(NASDAQ:NPCE)
45Neutral
Positive Factors
Financial Performance
NPCE reported Q4 revenue at the top-end of the pre-announced range, exceeding consensus expectations.
Growth Potential
The NAUTILUS clinical trial could expand the market significantly, opening 40% of the market with a $0.9B total addressable market expansion.
Market Positioning
Potential indication expansion into generalized epilepsy is anticipated to further support NPCE's market position.
Negative Factors
Cash Burn
Q4 cash burn increased to $4.8M compared to $3.4M in the previous year.
Revenue Estimates
The SEEG wind down is expected to create a headwind to total company growth in 2026, prompting a conservative decrease in the 2026 revenue estimate.
NeuroPace (NPCE) vs. S&P 500 (SPY)
Market Cap
$392.38M
Dividend YieldN/A
Average Volume (3M)178.75K
Price to Earnings (P/E)―
Beta (1Y)0.80
Revenue Growth22.14%
EPS Growth26.94%
CountryUS
Employees184
SectorHealthcare
Sector Strength57
IndustryMedical - Devices
Share Statistics
EPS (TTM)-0.94
Shares Outstanding32,752,747
10 Day Avg. Volume126,947
30 Day Avg. Volume178,746
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.57
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.76
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.00Price Target Upside50.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
NeuroPace Business Overview & Revenue Model
Company DescriptionNeuroPace, Inc. (NPCE) is a medical technology company focused on developing innovative solutions for the treatment of neurological disorders. The company's flagship product, the RNS System, is a groundbreaking neurostimulation device designed to monitor and respond to brain activity in order to reduce the frequency of seizures in individuals with epilepsy. NeuroPace operates within the healthcare and medical devices sectors, aiming to improve the quality of life for patients through advanced neurotechnology.
How the Company Makes MoneyNeuroPace generates revenue primarily through the sale of its RNS System to healthcare providers and hospitals. The company earns money by manufacturing and distributing these medical devices, which are typically covered by insurance plans, providing a steady stream of income. Additionally, NeuroPace may engage in partnerships with research institutions and healthcare organizations to further develop its technology and expand its market reach. The company might also explore opportunities for licensing its technology or enhancing its product offerings to increase its revenue streams.
NeuroPace Financial Statement Overview
Summary
NeuroPace shows strong revenue growth of 22% year-over-year, but faces profitability challenges with negative EBIT and net income margins. The high debt-to-equity ratio and negative free cash flow highlight financial risks and cash constraints. Despite a strong gross profit margin, the overall financial position is strained, requiring improved operational efficiencies and financial management.Income Statement
NeuroPace shows a positive revenue growth trend with a 22% increase from the previous year. However, the company is facing challenges with profitability as reflected in negative EBIT and net income margins. The gross profit margin remains strong at 74%, but the net profit margin remains at 0%, indicating operational challenges.45
Neutral
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio due to substantial debt levels, indicating potential financial risk. Equity has significantly decreased, impacting financial stability. The equity ratio is low at about 8%, highlighting reliance on debt financing.35
Negative
Cash Flow
NeuroPace's free cash flow remains negative, indicating cash constraints. The free cash flow growth shows a slight improvement but remains negative, and the operating cash flow to net income ratio is unfavorable, reflecting cash generation issues relative to reported earnings.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 79.91M | 65.42M | 45.52M | 45.18M | 41.14M | Gross Profit |
| 59.09M | 48.12M | 32.49M | 33.44M | 30.27M | EBIT |
| -21.67M | -27.17M | -40.79M | -23.74M | -13.05M | EBITDA |
| -16.57M | -22.83M | -36.57M | -28.37M | -12.48M | Net Income Common Stockholders |
| -27.14M | -32.96M | -53.37M | -38.11M | -35.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 52.76M | 66.45M | 77.41M | 115.58M | 38.08M | Total Assets |
| 94.65M | 107.65M | 114.11M | 133.56M | 55.95M | Total Debt |
| 73.34M | 72.39M | 69.77M | 49.85M | 52.86M | Net Debt |
| 59.91M | 54.34M | 63.16M | 30.66M | 26.47M | Total Liabilities |
| 86.63M | 87.00M | 79.33M | 60.06M | 203.78M | Stockholders Equity |
| 8.01M | 20.65M | 34.78M | 73.50M | -147.83M |
| Cash Flow | Free Cash Flow | |||
| -17.95M | -19.87M | -37.47M | -24.96M | -21.67M | Operating Cash Flow |
| -17.95M | -19.70M | -36.87M | -24.58M | -21.61M | Investing Cash Flow |
| 8.99M | 23.03M | 23.80M | -85.40M | -10.77M | Financing Cash Flow |
| 4.33M | 8.13M | 490.00K | 102.53M | 55.01M |
NeuroPace Technical Analysis
Positive
11.98
Price Trends
11.76
Positive
12.04
Negative
9.78
Positive
Market Momentum
-0.06
Negative
53.32
Neutral
77.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NPCE, the sentiment is Positive. The current price of 11.98 is above the 20-day moving average (MA) of 11.27, above the 50-day MA of 11.76, and above the 200-day MA of 9.78, indicating a bullish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 53.32 is Neutral, neither overbought nor oversold. The STOCH value of 77.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NPCE.
NeuroPace Risk Analysis
NeuroPace disclosed 76 risk factors in its most recent earnings report. NeuroPace reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NeuroPace Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $71.43M | 10.65 | 12.70% | ― | 71.31% | 1277.03% | |
57 Neutral | $403.75M | ― | -81.24% | ― | 31.04% | 22.18% | |
52 Neutral | $5.35B | 3.96 | -42.60% | 2.86% | 17.58% | 1.27% | |
50 Neutral | $207.15M | ― | -81.58% | ― | 30.53% | -35.97% | |
45 Neutral | $392.38M | ― | -189.35% | ― | 22.14% | 26.94% | |
41 Neutral | $464.49M | ― | -166.29% | ― | 0.37% | -20.49% | |
39 Underperform | $328.37M | ― | -27.83% | ― | 13.91% | 15.46% |
* Healthcare Sector Average
Performance Comparison
NPCE
NeuroPace
11.98
-1.49
-11.06%
CLPT
ClearPoint Neuro
14.43
8.49
142.93%
SRTS
Sensus Healthcare
4.33
0.57
15.16%
SENS
Senseonics Holdings
0.71
0.21
42.00%
NNOX
Nano-X Imaging
5.15
-4.30
-45.50%
CVRX
CVRx
7.95
-0.02
-0.25%
NeuroPace Earnings Call Summary
Earnings Call Date:Mar 04, 2025
(Q4-2024)
| % Change Since: 0.50%|
Next Earnings Date:May 13, 2025
Earnings Call Sentiment Positive
NeuroPace demonstrated strong revenue growth and operational success in 2024, with significant advancements in clinical trials and product development. Despite a net loss and increased operating expenses, the company's strategic initiatives, including Project CARE and successful public offering, position it well for future growth. The overall sentiment is positive, given the successful financial and operational achievements overshadowing the financial challenges.Q4-2024 Updates
Positive Updates
Significant Revenue Growth
NeuroPace's total revenue grew by 22% in 2024 to $79.9 million, compared to $65.4 million in 2023. This growth was primarily driven by increased sales of the RNS system and Dixie Medical SEEG products.
Record Quarterly Revenue
NeuroPace reported record quarterly revenue in Q4 2024, with revenue of $21.5 million, representing a growth of 19% compared to $18 million in Q4 2023.
Gross Margin Stability
Gross margins for Q4 2024 were 75.4%, showing improvement from 75.2% in Q4 2023, demonstrating effective management of gross and operating margins.
Successful Public Offering
NeuroPace completed a public offering with net proceeds of approximately $69.8 million, which strengthened the balance sheet and supported long-term plans.
Project CARE Progress
The Project CARE program showed positive early trends, contributing to revenue growth in the second half of 2024 with increased implants and referrals.
Advancement in Clinical Trials
Positive three-year safety and effectiveness data from the ongoing post-approval study of the RNS system were announced, indicating unmatched seizure control.
Product Development Initiatives
NeuroPace is developing AI-enabled software tools and a next-generation platform to enhance efficiency and efficacy, including an AI-powered seizure classifier.
Negative Updates
Operating Expense Increase
Operating expenses increased by 7% in Q4 2024 compared to the same period in 2023, driven by increased personnel and program expenses for product development.
Net Loss
Net loss for Q4 2024 was $5.3 million, although this was an improvement compared to $6.2 million in Q4 2023.
Interest Expense
The interest expense remained steady at $2.2 million in Q4 2024, indicating continued financial obligations.
Reimbursement Challenges
There is a need to work with payers to expand coverage criteria for new indications (generalized and pediatric epilepsy), aligning policies with FDA-approved indications.
Company Guidance
During the NeuroPace Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, projecting total revenue to be in the range of $92 million to $96 million, which represents a growth of approximately 15% to 20% over 2024. This growth is expected to be driven primarily by increased sales of the RNS system and contributions from Dixie Medical products. The company also anticipated maintaining gross margins between 73% and 75% for 2025, despite potential fluctuations due to the proportion of Dixie Medical revenue. Operating expenses for 2025 are expected to range between $92 million and $95 million, including approximately $11 million in stock-based compensation. NeuroPace's strategic focus on expanding adoption and utilization within level four comprehensive epilepsy centers, the continued rollout of Project CARE, and new indications for the RNS system are key drivers for their projected growth.NeuroPace Corporate Events
Business Operations and StrategyFinancial Disclosures
NeuroPace Expects Minimal Impact from Trade Tariffs
Neutral
Apr 14, 2025
On April 14, 2025, NeuroPace announced that it expects minimal impact from international trade tariffs on its operations and financial results, reaffirming its gross margin guidance for 2025. The company, which primarily manufactures and sells its devices in the U.S., anticipates no significant effect on its gross margin despite terminating its SEEG distribution agreement with DIXI Medical effective October 1, 2025. NeuroPace will report its first quarter 2025 financial results on May 13, 2025, with a conference call scheduled for the same day.
Spark’s Take on NPCE Stock
According to Spark, TipRanks’ AI Analyst, NPCE is a Neutral.
NeuroPace exhibits significant revenue growth and strategic initiatives, which bolster its potential. However, high debt levels and negative cash flows pose substantial risks. The technical outlook is positive, yet valuation concerns due to negative earnings persist.
To see Spark’s full report on NPCE stock, click here.
Product-Related AnnouncementsBusiness Operations and Strategy
NeuroPace Shifts Focus to Core RNS System
Neutral
Apr 2, 2025
On April 2, 2025, NeuroPace, Inc. announced a strategic shift in its product portfolio, focusing on its core RNS System and ending its distribution agreement with DIXI Medical USA Corp. for SEEG products by September 30, 2025. This move is part of a broader plan to concentrate resources on expanding opportunities for the RNS System, including new indications and AI-enabled software, while maintaining 2025 revenue guidance and aiming for cash flow breakeven by 2027.
Stock BuybackBusiness Operations and Strategy
NeuroPace Completes Significant Stock Repurchase from KCK Ltd.
Positive
Feb 20, 2025
On February 20, 2025, NeuroPace announced the completion of its repurchase of 5,270,845 shares of its common stock from KCK Ltd., using proceeds from a recent public offering. This strategic move, along with the termination of its ATM equity offering program, has strengthened the company’s financial position, enabling it to focus on executing its long-term plans and reaching cash flow breakeven, while also demonstrating investor confidence in its mission.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.