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On Monday, Jefferies analyst Matthew Taylor revised the stock rating for Nevro Corp (NYSE:NVRO), elevating it from Underperform to Hold. Accompanying this upgrade, the price target also saw an increase to $5.85, up from the previous $4.50. This adjustment follows Nevro’s recent announcement regarding its acquisition by GMED, a company that Taylor rates favorably. The stock, currently trading at $5.72, has shown strong momentum with a 14.86% gain over the past week. According to InvestingPro, the RSI suggests the stock is in overbought territory, with 8 more real-time insights available to subscribers.
The acquisition agreement set the share price at $5.85, valuing Nevro at approximately $250 million in total equity. Taylor noted that while there is some commercial overlap between Nevro and GMED, it is not substantial enough to cause significant regulatory concerns. The expectation is that the transaction will be finalized in late second quarter of 2025, with Taylor indicating a low probability of any competing offers emerging to challenge the agreed terms. InvestingPro data shows Nevro maintains a healthy financial position with a current ratio of 5.02, indicating strong liquidity to meet short-term obligations.
The analyst’s decision to raise the price target to $5.85 is directly tied to the acquisition price proposed by GMED. With this new target in place, Jefferies signals its belief that the stock will perform at a level consistent with the agreed acquisition value. The upgrade to a Hold rating reflects a neutral stance, suggesting that Jefferies does not foresee significant movement in either direction for Nevro’s stock price in the near term, barring unforeseen circumstances.
Investors and market watchers will be keeping a close eye on the progress of this acquisition, which is poised to consolidate Nevro’s position in the market with GMED’s backing. The successful closure of the deal would mark a pivotal moment for Nevro, potentially reshaping its future operations and market strategy.
In other recent news, Nevro Corp has been the subject of several analyst adjustments. Piper Sandler upgraded Nevro’s stock to Neutral and adjusted the price target to $5.85, following the announcement of Nevro’s definitive agreement to be acquired by Globus Medical (NYSE:GMED) Inc. for $5.85 per share in cash. Mizuho (NYSE:MFG) Securities maintained a Neutral rating on Nevro’s shares but lowered its price target from $8.00 to $6.00, citing the company’s potential in the painful diabetic neuropathy (PDN) market. However, Morgan Stanley (NYSE:MS) downgraded Nevro’s stock from Equalweight to Underweight and cut its price target to $4.00 due to several challenges faced by the company, particularly within its Spinal Cord Stimulation (SCS) business.
These developments come as Nevro reported a decline in Q4 revenue but an increase in cash reserves. The company’s Q4 worldwide revenue is expected to be between $105 million and $106 million, marking a decrease of 9% to 10% from the same period in 2023. However, the company’s cash, cash equivalents, and short-term investments rose by approximately $15.5 million in the fourth quarter, totaling around $292.5 million as of December 31, 2024.
Despite these financial results and the pending acquisition, there are concerns about Nevro’s growth trajectory. Piper Sandler, for instance, reduced its price target to $6 from the previous $7 while retaining an Underweight rating on the stock, even as Nevro’s third-quarter earnings surpassed consensus expectations. Analysts from different firms will continue to monitor Nevro’s performance as these recent developments unfold.
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