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On Tuesday, Cantor Fitzgerald reaffirmed its Overweight rating and a $20.00 price target for NeuroPace Inc (NASDAQ:NPCE), a medical device company specializing in the treatment of epilepsy. Currently trading at $11.24, the stock has shown significant volatility, with InvestingPro data revealing a strong 64.8% gain over the past six months despite recent pullbacks. Stifel analysts emphasized that despite a recent drop in share value, which saw the stock decline approximately 23% from its year-to-date high of $14.69 on January 29, they view the current levels as an appealing opportunity for investors. Notably, four analysts have recently revised their earnings expectations upward for the upcoming period.
The analysts highlighted four key reasons for their positive outlook. Firstly, they anticipate that NeuroPace will surpass expectations due to increased adoption and utilization at existing Level 4 comprehensive epilepsy centers (CECs). This optimism is supported by the company’s impressive 22.1% revenue growth and robust 73.9% gross profit margin in the last twelve months. Secondly, they pointed to the potential of PROJECT CARE, a program aimed at broadening access to the RNS System beyond Level 4 CECs, to drive incremental growth as new centers both refer patients to CECs and serve as new implantation sites.
Additionally, expectations are set for NeuroPace to complete the 12-month follow-up of the NAUTILUS trial and submit for an expanded indication to treat generalized epilepsy, a market opportunity estimated at approximately $900 million, within the first quarter of 2025. Analysts noted that some doctors have already been using the RNS System off-label to treat generalized epilepsy with success, suggesting a decreased risk for the trial’s outcome. For deeper insights into NeuroPace’s growth potential and market positioning, InvestingPro offers comprehensive analysis with 10+ additional exclusive ProTips and detailed financial metrics.
Lastly, NeuroPace’s status as a U.S.-based business was cited as a protective factor against tariff and manufacturing or supply risks, which could potentially affect other companies with international production lines.
NeuroPace Inc’s focus on developing advanced treatments for epilepsy through its RNS System—a brain-responsive neurostimulation system—remains a central point of interest for investors and analysts alike as the company moves towards its anticipated milestones in the coming year.
In other recent news, NeuroPace Inc. announced its fourth-quarter 2024 financial results, reporting a revenue of $21.5 million, which exceeded analysts’ expectations of $20.91 million. The company’s adjusted earnings per share (EPS) also surpassed forecasts, coming in at -$0.18 compared to the expected -$0.25. This performance was attributed to strong sales of NeuroPace’s RNS System and DIXI Medical (TASE:BLWV) products, which contributed to a 19% year-over-year revenue increase for the quarter. NeuroPace’s total revenue for 2024 reached $79.9 million, marking a 22% increase from the previous year.
Cantor Fitzgerald analyst Ross Osborn maintained an Overweight rating on NeuroPace, reaffirming a price target of $20.00, reflecting confidence in the company’s growth trajectory. The firm also completed a successful capital raise during its Investor Day, with plans to utilize the funds for a share buyback program, which aims to support the company’s financial stability and benefit shareholders. Additionally, NeuroPace confirmed its revenue guidance for fiscal year 2025, projecting an increase of 15-20% over 2024, signaling a positive outlook for the coming year.
The company is focused on expanding its commercial organization and enhancing consumer awareness to drive future growth. NeuroPace is also advancing key development programs, including the Nautilus project, with expectations for a data readout and FDA submission in the second half of 2025. These recent developments underscore NeuroPace’s strategic initiatives to strengthen its market position and financial performance.
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