Neuronetics shares surge 15% after Q2 earnings beat

Neuronetics shares jumped 15% on Tuesday after the medical device company reported second-quarter earnings that exceeded analyst expectations.

The company, which develops non-invasive brain stimulation therapies, said adjusted earnings per share came in at 12 cents, surpassing the 8-cent consensus estimate from Refinitiv. Revenue totaled $25.3 million, up 12% from the same period last year and above the $23.1 million forecast.

Gross margin expanded to 72%, reflecting operational efficiencies and cost controls, while operating expenses rose 8% year-over-year. Cash and cash equivalents increased to $52.4 million at quarter-end, up from $45.1 million in March.

Analysts at William Blair maintained an Outperform rating on the stock, citing the company’s improving profitability and expanding market share in transcranial magnetic stimulation (TMS) therapy. The stock has gained roughly 28% over the past three months, outpacing the S&P 500 Healthcare Index, which is down 3% over the same period.

Neuronetics has faced volatility in recent quarters amid broader sector headwinds, including reimbursement pressures and competition in mental health treatments. The company’s focus on TMS, a non-drug alternative for conditions like depression, has positioned it as a key player in the growing neuromodulation market.

The stock’s strong performance follows a series of positive clinical updates and partnerships aimed at expanding access to TMS therapy. Investors will be watching for guidance updates during the company’s earnings call scheduled for later this week.