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Neuronetics (STIM)

Neuronetics, Inc. is a commercial-stage medical technology company focused on designing, developing, and marketing products that improve the quality of life for patients who suffer from psychiatric disorders. Its commercial product, the NeuroStar® Advanced Therapy System, is a non-invasive and non-systemic office-based treatment that uses transcranial magnetic stimulation, or TMS, to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The system is cleared by the United States Food and Drug Administration, or FDA, for the treatment of major depressive disorder in adult patients who have failed to achieve satisfactory improvement from prior antidepressant medication in the current episode. Visit NeuroStar.com for safety information and indications for use. NeuroStar is also available in other parts of the world, including Japan, where it is listed under Japan's national health insurance.

STIM stock data

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

12 May 22
2 Jul 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 80.84M 80.84M 80.84M 80.84M 80.84M 80.84M
Cash burn (monthly) 4.43M 3.37M 3.38M 2.57M 4.06M 2.58M
Cash used (since last report) 13.59M 10.33M 10.35M 7.86M 12.44M 7.92M
Cash remaining 67.25M 70.51M 70.48M 72.97M 68.39M 72.92M
Runway (months of cash) 15.2 20.9 20.9 28.4 16.8 28.2

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
17 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.37 1,130 3.81K 3,463,846
16 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.09 2,576 7.96K 3,462,716
15 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.57 1,364 4.87K 3,460,140
14 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.57 1,347 4.81K 3,458,776
13 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.52 1,347 4.74K 3,457,429
10 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 3.46 4,350 15.05K 3,456,082
1 Jun 22 Cannell Capital Neuronetics, Inc. Ordinary Stock Buy Acquire P Yes No 2.69 10,000 26.9K 3,451,732
26 May 22 Bruce Joseph Shook Common Stock Grant Acquire A No No 0 38,910 0 68,847
26 May 22 Megan Rosengarten Common Stock Grant Acquire A No No 0 38,910 0 49,526
77.6% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 84 82 +2.4%
Opened positions 14 10 +40.0%
Closed positions 12 28 -57.1%
Increased positions 27 34 -20.6%
Reduced positions 31 23 +34.8%
13F shares Current Prev Q Change
Total value 70.09M 136.44M -48.6%
Total shares 20.65M 20.93M -1.3%
Total puts 0 0
Total calls 0 241.2K EXIT
Total put/call ratio
Largest owners Shares Value Change
Cannell Capital 2.75M $8.33M +4.5%
Schroder Investment Management 1.81M $5.55M -1.7%
Archon Capital Management 1.8M $5.46M -2.9%
BLK Blackrock 1.58M $4.77M -1.2%
Vanguard 1.07M $3.23M -8.8%
Parian Global Management 956K $2.9M -32.7%
Flynn James E 919K $10.21M 0.0%
Nantahala Capital Management 880.16K $2.67M NEW
SAMG Silvercrest Asset Management 854.45K $2.59M +0.9%
Millennium Management 750.55K $2.27M +73.3%
Largest transactions Shares Bought/sold Change
FMR 47.39K -947.96K -95.2%
Nantahala Capital Management 880.16K +880.16K NEW
Parian Global Management 956K -463.7K -32.7%
Millrace Asset 490.34K +378.59K +338.8%
Millennium Management 750.55K +317.44K +73.3%
Norges Bank 0 -263.2K EXIT
Renaissance Technologies 186K +186K NEW
Jacobs Levy Equity Management 28.94K -145.1K -83.4%
Royce & Associates 253.5K -133K -34.4%
First Eagle Investment Management 339.47K +119.59K +54.4%

Financial report summary

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Competition
BrainswayBrainsway
Risks
  • We have incurred losses in the past and may be unable to achieve or sustain profitability in the future.
  • We rely on the sale of our NeuroStar Advanced Therapy System and treatment sessions to generate revenues.
  • The COVID-19 pandemic has had, and we expect will continue to have, an adverse effect on our business, results of operations, financial condition and cash flows, the nature and extent of which are highly uncertain and unpredictable.
  • If coverage is unavailable or reimbursement from third-party payors for treatments using our products significantly declines, psychiatrists may be reluctant to use our products.
  • If we are unable to adequately train psychiatrists and other treatment providers on the safe and appropriate use of our products, we may be unable to achieve our expected growth.
  • Customers and their patients may be slow to adopt and use TMS therapies.
  • Our success depends upon patient satisfaction with the effectiveness of our NeuroStar Advanced Therapy System.
  • We operate in a very competitive environment and if we are unable to compete successfully against our existing or potential competitors, our sales and operating results may be negatively affected.
  • We may face difficulties encountered by companies in new and evolving markets.
  • If we are unable to adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products and we may never generate sufficient revenues to achieve or sustain profitability.
  • The loss of any member of our senior management or our inability to attract and retain highly skilled executives, salespeople, product development and other personnel could negatively impact our business.
  • Our long-term growth depends on our ability to commercialize our approved products for current and future indications and to develop and commercialize additional products through our research and development efforts. If we fail to do so we may be unable to compete effectively.
  • We rely on single-source suppliers for some components used in our NeuroStar Advanced Therapy System and on a single manufacturer for the assembly of our NeuroStar Advanced Therapy System, and we may be unable to find replacements or immediately transition to alternative parties for these components.
  • We may be unable to achieve or manage our anticipated growth effectively, which could make it difficult to execute our business strategy.
  • We rely and, in the future, expect to rely on a network of third-party distributors to market and distribute our products internationally, and if we are unable to maintain and expand this network, we may be unable to generate anticipated sales.
  • We face risks associated with our international business.
  • Our employees, consultants, distributors and other commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
  • We rely in part on third parties to conduct our clinical trials. If these third parties fail to perform their duties on time or as expected, we may not be able to obtain regulatory approval for additional indications that we may seek for the NeuroStar Advanced Therapy System.
  • If product liability lawsuits are brought against us, our business may be harmed, and we may be required to pay damages that exceed our insurance coverage.
  • Our insurance policies protect us only from some business risks, which will leave us exposed to significant uninsured liabilities.
  • We bear the risk of warranty claims on our products.
  • We could be negatively impacted by violations of applicable anti-corruption laws or violations of our internal policies designed to ensure ethical business practices.
  • If we experience significant disruptions in our information technology systems, our business may be adversely affected.
  • Performance issues, service interruptions or price increases by our shipping carriers could adversely affect our business and harm our reputation and ability to provide our services on a timely basis.
  • Security and privacy breaches may expose us to liability and harm our reputation and business.
  • Employment litigation and unfavorable publicity could negatively affect our future business.
  • The 2017 comprehensive tax reform law could adversely affect our business and financial condition.
  • Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts.
  • Our operations are vulnerable to interruption or loss due to natural or other disasters, power loss, strikes and other events beyond our control.
  • Epidemic diseases could negatively affect various aspects of our business, make it more difficult to meet our obligations to our customers, and could result in reduced demand from our customers. These could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
  • We may seek to grow our business through acquisitions or investments in new or complementary businesses, products or technologies, through the licensing of products or technologies from third parties. The failure to manage acquisitions, investments, licenses or other strategic alliances, or the failure to integrate them with our existing business, could harm our business.
  • Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
  • Our sales volumes and our results of operations may fluctuate over the course of the year.
  • If we are not able to obtain and enforce patent protection for our technologies, products, or product candidates, development and commercialization of our products and product candidates may be adversely affected.
  • Our inability to effectively protect our proprietary technologies could harm our competitive position.
  • The lives of our patents may not be sufficient to effectively protect our products and business.
  • Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products.
  • If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.
  • We may be unable to enforce our intellectual property rights throughout the world.
  • Third parties may assert ownership or commercial rights to inventions we develop.
  • Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
  • Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
  • Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
  • If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.
  • Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products.
  • If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
  • Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business.
  • We may not receive the necessary regulatory clearances or approvals to market our future products or other proposed indications for our products in the future, and failure to timely obtain necessary clearances or approvals for such future products or indications would adversely affect our ability to grow our business.
  • Our products must be manufactured in accordance with federal and state regulations, and we could be forced to recall our installed systems or terminate production if we fail to comply with these regulations.
  • If treatment guidelines for the clinical conditions we are targeting change or the standard of care evolves, we may need to redesign and seek new marketing authorization from the FDA for one or more of our products.
  • The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies, particularly if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
  • Our products may cause or contribute to adverse medical events that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.
  • If we or our distributors do not obtain and maintain international regulatory registrations or approvals for our products, we will be unable to market and sell our products outside of the United States.
  • We are subject to certain federal, state and foreign fraud and abuse laws, health information privacy and security laws and transparency laws, which, if violated, could subject us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.
  • Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system, could harm our cash flows, financial condition and results of operations.
  • We may need to raise additional capital to fund our existing commercial operations, develop and commercialize new products and expand our operations.
  • Our ability to use net operating losses to offset future taxable income may be subject to limitations.
  • The terms of our credit facility place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
  • The price of our common stock may be volatile.
  • Future sales of our common stock or securities convertible or exchangeable for our common stock may cause our stock price to decline.
  • Our principal stockholders and management own a significant percentage of our stock and are able to exert control over matters subject to stockholder approval.
  • Provisions of our amended and restated charter documents or Delaware law could delay or prevent an acquisition of the company, even if the acquisition would be beneficial to our stockholders, which could make it more difficult for you to change management.
  • Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
  • We do not anticipate paying any cash dividends on our common stock in the foreseeable future; therefore, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
  • We may be subject to securities litigation, which is expensive and could divert our management’s attention.
  • We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.
  • We are obligated to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and the value of our common stock.
  • If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research or reports about our business, our stock price and trading volume could decline.
Management Discussion
  • Total revenue for the three months ended March 31, 2022 was $14.2 million, an increase of 15% compared to the three months ended March 31, 2021 revenue of $12.3 million. During the quarter, total U.S. revenue increased by 15% and international revenue increased by 37% over the prior year quarter. The U.S. and international revenue growth were each driven by an increase in NeuroStar Advanced Therapy System sales.
  • U.S. NeuroStar Advanced Therapy System revenue for the three months ended March 31, 2022 was $3.6 million, an increase of 108% compared to the three months ended March 31, 2021 revenue of $1.8 million. For the three months ended March 31, 2022 and 2021, the Company shipped 48 and 23 systems, respectively. Of the 48 systems shipped in the first quarter of 2022, 45 units were recognized as NeuroStar capital revenue, 1 unit was recognized as an operating lease contributing to operating lease revenue and 2 units we expect to recognize as NeuroStar capital revenue in the second quarter of 2022. For the period ended March 31, 2021, the Company recognized the 23 units shipped as NeuroStar capital revenue.
  • U.S. Treatment Session revenue for the three months ended March 31, 2022 was $9.5 million, a decrease of 2% compared to the three months ended March 31, 2021 revenue of $9.6 million. The revenue decline was primarily driven by a decrease in Treatment Session volume over the prior year quarter due to the impact of the spike in COVID-19 Omicron variant infections and related business and government responses in January and February 2022.

Content analysis

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Positive
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Legalese
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