Neuronetics Stock Gains on B. Riley Initiation of Coverage
Neuronetics Inc (NASDAQ:STIM) shares rose 3.5% on Friday following the initiation of coverage by B. Riley analyst Madison El‑Saadi, who assigned a Buy rating and set a price target of $5.00. The target price represents approximately 70% upside from the prevailing market price.
El‑Saadi’s coverage follows Neuronetics’ late‑2024 acquisition of Greenbrook and a management reset scheduled for 2026. He highlighted that Greenbrook is expected to deliver organic revenue growth in the mid‑teens range and possesses substantial unused capacity, positioning Neuronetics to transition from a levered transcranial magnetic stimulation (TMS) device company to a scaled interventional psychiatry platform.
The analyst emphasized that this transformation aligns with accelerating commercial adoption, payer acceptance, and specialist training, creating a new wave of interventional psychiatry. He also noted a broader psychedelic‑driven shift in the field, though the $5 price target assumes minimal contribution from psychedelics at present.
B. Riley pointed to the resolution of covenants and sustained positive adjusted EBITDA as supportive of a higher valuation multiple for Neuronetics’ dual‑device/services business model. Currently, the stock trades at roughly 1.5× FY28E enterprise‑value‑to‑sales, compared with an average of about 2.4× for blended peers. The $5 target reflects a normalization toward that peer benchmark.
El‑Saadi added that potential approval of the COMP360 device in the first half of FY27E, followed by a series of subsequent approvals across the psychedelic category, could justify a premium multiple beyond the baseline valuation.