H.C. Wainwright sets $18 target on NeuroPace stock with Buy rating

On Wednesday, H.C. Wainwright initiated coverage on NeuroPace Inc (NASDAQ:NPCE), a medical device company specializing in the development and marketing of the RNS system for epilepsy treatment, with a Buy rating and a price target of $18.00. The firm’s analyst, Yi Chen, highlighted the company’s solid revenue growth of 22% and the RNS system’s clinical effectiveness in treating drug-resistant focal epilepsy. According to InvestingPro data, analyst consensus remains highly bullish, with price targets ranging from $15 to $20.

NeuroPace’s RNS system, approved in 2013, is a brain-responsive neuromodulation system designed to provide personalized, real-time treatment directly at the source of seizures. The system includes both implantable components, such as a neurostimulator and electrodes, and external elements like the Patient Remote Monitor. Clinicians program the device to deliver an average of three minutes of stimulation per day, with the neurostimulator’s battery lasting nearly 11 years.

The company has shown strong financial performance, with full-year 2024 revenue reaching $79.9 million, a 22% year-over-year increase. The first quarter of 2025 continued this trend with $22.5 million in revenue, marking a 24% year-over-year growth. Management’s guidance for full-year 2025 anticipates revenues between $93 million and $97 million, representing 16-21% year-over-year growth. Furthermore, management expects a compound annual growth rate (CAGR) of over 20% through 2027. InvestingPro analysis reveals impressive gross margins of 75% and a healthy current ratio of 6.63, indicating strong operational efficiency and liquidity. Get access to 10+ additional key metrics and insights with InvestingPro.

NeuroPace’s stock has seen impressive growth, with shares appreciating 79% in the past 12 months according to InvestingPro, outperforming the XBI, which experienced an 11% decline. The analyst pointed out that the recent price cut of 30% over the past week following the one-year data readout from the NAUTILUS study offers an attractive entry point for investors, as the data did not affect the RNS system’s strong sales momentum in patients with focal epilepsy. Discover comprehensive valuation analysis and 8 additional ProTips available exclusively on InvestingPro.

In conclusion, H.C. Wainwright’s initiation of coverage on NeuroPace with a Buy rating and a 12-month price target of $18 reflects confidence in the company’s revenue growth and the clinical value of its RNS system for patients with drug-resistant focal epilepsy.

In other recent news, NeuroPace Inc reported mixed results from its NAUTILUS study, which evaluated the RNS System for treating idiopathic generalized epilepsy (IGE). While the study met its primary safety endpoint, it did not achieve statistical significance in the primary effectiveness endpoint for the overall population. However, a subgroup of patients with lower baseline seizure frequency showed a statistically significant response, indicating potential benefits for this group. NeuroPace plans to submit the full dataset to the FDA and engage in discussions about regulatory pathways, possibly focusing on targeted indications.

Additionally, NeuroPace announced impressive first-quarter earnings for 2025, with revenues of $22.5 million, surpassing both Cantor Fitzgerald’s and FactSet’s projections. This marks a 24% year-over-year increase, driven by strong sales of the RNS System. Consequently, NeuroPace has raised its full-year revenue guidance for 2025 to $93-97 million, reflecting a projected growth of 16-21%.

Cantor Fitzgerald maintained an Overweight rating on NeuroPace, highlighting the company’s robust financial performance and potential for future growth. Leerink Partners also retained an Outperform rating, expressing cautious optimism despite the NAUTILUS study’s mixed results. NeuroPace’s management remains confident in its long-term growth strategy and the potential for expanding indications for the RNS System.

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