On Monday, H.C. Wainwright reaffirmed its Buy rating and $16.00 price target for BrainsWay (NASDAQ:BWAY), highlighting recent favorable clinical data. The stock, currently trading at $9.24, has shown strong momentum with a 50% price return over the past six months.
According to InvestingPro data, the company maintains excellent financial health with a "GREAT" overall score, supported by robust liquidity metrics. The company has reported positive clinical outcomes for its Deep Transcranial Magnetic Stimulation (Deep TMS) therapy in patients with chronic peripheral neuropathic pain. The findings were published in the peer-reviewed journal ’Neuromodulation.’
The study in question was a double-blind, randomized crossover trial involving 17 patients suffering from chronic neuropathic pain. Participants received either the active Deep TMS or a sham treatment over five days. This was followed by a nine-week washout period before switching to the other treatment arm. The primary measure of the study was the patients’ self-reported changes in pain levels from the baseline.
The results indicated that the active Deep TMS therapy significantly reduced the intensity of usual pain compared to the sham treatment. It also showed improvements in co-morbid symptoms such as anxiety and depression among the same group of patients. These outcomes suggest potential benefits of Deep TMS beyond the initial treatment focus.
Although BrainsWay’s market forecasts do not currently include projections for the treatment of neuropathic pain, the analyst noted the large potential market. In the United States alone, an estimated 16 million people suffer from persistent neuropathic pain, which could represent a significant long-term target market for BrainsWay’s Deep TMS therapy.
The company’s strong revenue growth of 34% and impressive gross margin of 75% suggest solid execution capability. InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report, offering deeper analysis of BWAY’s growth potential and market positioning.
The reiteration of the Buy rating and the $16 price target by H.C. Wainwright reflects the firm’s positive outlook on BrainsWay’s prospects, particularly in light of the recent clinical data supporting the effectiveness of its non-invasive therapy platform. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, despite maintaining a healthy current ratio of 4.52 and strong operational metrics.
In other recent news, BrainsWay Ltd. has reported encouraging results from a Stanford University pilot study on treating alcohol use disorder (AUD) with its Deep Transcranial Magnetic Stimulation (TMS) technology. The study suggests that an accelerated Deep TMS protocol might improve treatment outcomes for AUD patients. Following the study, the U.S. National Institutes of Health awarded approximately $1.5 million to the research team to further explore Deep TMS in treating substance addictions.
In financial news, BrainsWay has reported a significant 26% increase in its revenue for the third quarter of 2024, reaching $10.5 million. This marks the fourth consecutive quarter of positive net income and adjusted EBITDA for the company. Additionally, Valor Equity Partners provided $20 million in equity financing, which increased the company’s pro forma cash to $68.4 million.
These recent developments also include an increase in the company’s full-year 2024 revenue guidance to $40-41 million, with an expected operating income of 3-4%. BrainsWay is also in the midst of an ongoing clinical trial for an accelerated treatment for major depressive disorder, with FDA clearance expected in 2025. Despite geopolitical concerns, the company’s operations in Israel remain uninterrupted, and it has a continuity plan to ensure production for the upcoming six months.
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