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MALVERN, PA - Neuronetics (NASDAQ:STIM), Inc., a medical device company, has been notified by The Nasdaq Stock Market LLC of a potential delisting due to its stock price falling below the required minimum. The company, which specializes in surgical and medical instruments, received a deficiency letter from Nasdaq on Thursday, stating that its common stock, traded under the symbol STIM, had not met the $1.00 per share minimum bid price for the last 30 consecutive business days.
Despite this notice, Neuronetics' stock will continue to trade on The Nasdaq Global Market while the company seeks to regain compliance. Neuronetics has until April 1, 2025, to elevate its stock price to meet the Minimum Bid Price Requirement. If the stock price reaches $1.00 or higher for at least 10 consecutive business days before this deadline, the company will be considered compliant.
Should Neuronetics fail to meet the requirement by April 1, 2025, it may be granted an additional 180 days to comply, during which it would need to transfer its listing to The Nasdaq Capital Market. This second grace period is contingent upon the company meeting all other initial listing standards, except for the Minimum Bid Price Requirement, and communicating its intent to address the deficiency.
In other recent news, Neuronetics experienced a downgrade in stock rating from Outperform to Market Perform by William Blair, following the company's second-quarter financial results. The company reported sales of $16.5 million, falling short of both the firm's estimate and the company's own guidance range, due to altered purchasing patterns influenced by the Change Health cyberattack. Despite this, Neuronetics observed an 18% growth in utilization of local consumables, indicating robust demand for its treatments.
Simultaneously, Neuronetics is preparing for a merger with Greenbrook TMS, which is expected to generate revenue and cost synergies, pushing the company towards sustained profitability from 2025. The merger is anticipated to streamline operations, potentially extend insurance payor contracts to other customers, and boost brand recognition for NeuroStar TMS therapy.
Furthermore, Neuronetics is investing in its Better Me Guarantee Program and is launching a television advertising campaign in Tampa Bay, Florida, to increase therapy awareness. The company also reaffirmed its full-year 2024 revenue guidance, which remains set between $78 million and $80 million. These developments reflect the strategic steps Neuronetics is taking to navigate current challenges, with a goal of achieving positive cash flow in 2025.
InvestingPro Insights
The recent notification from Nasdaq regarding Neuronetics' potential delisting aligns with several key insights from InvestingPro. The company's market capitalization stands at a modest $25.99 million, reflecting its current challenges. InvestingPro Tips highlight that Neuronetics' stock price has fallen significantly over the last three months, with a substantial 55.62% decline in the three-month price total return. This downward trend extends further, with a striking 80.59% drop over the past six months.
These metrics underscore the gravity of Neuronetics' situation and the urgency to address the minimum bid price requirement. Additionally, InvestingPro Tips indicate that the company is quickly burning through cash and is not profitable over the last twelve months, factors that may contribute to investor hesitancy and the stock's current valuation.
On a more positive note, liquid assets exceed short-term obligations, potentially providing some financial flexibility as Neuronetics navigates this challenging period. For investors seeking a deeper understanding of Neuronetics' financial health and prospects, InvestingPro offers 8 additional tips that could prove valuable in assessing the company's path forward.
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