Aug 31, 2023

Nevro stock is down on slashed 2023 guidance

August 2, 2023 By Chris Newmarker

Nevro (NYSE: NVRO) stock lost more than a fifth of its value this morning — a day after the maker of spinal cord stimulation devices greatly reduced its full-year guidance.

Redwood City, California–based Nevro now expects full-year 2023 revenue of roughly $410–415 million, an increase of 1–2% over 2022. The previous guidance was for $445–455 million, a 10–12% increase. Nevro also now projects full-year non-GAAP adjusted EBITDA to be a loss of approximately $25–28 million, versus previous guidance of a loss of $5–10 million.

NVRO shares were down more than 23% to $18.85 apiece by late morning trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.

For the quarter ended June 30, 2023, revenue grew 4% year-over-year to $108.8 million. Losses of $24.7 million, or 69¢ per share, were about the same as Q2 2022.

“While we are encouraged by the early signs of recovery and the long-term outlook of the SCS market, the market recovery will not be linear. We do expect a return to sustained historical market growth rates and are working to lay a stronger foundation in our commercial execution as we transition into our next phase of growth,” Nevro CEO Kevin Thornal said in a news release.

“With our new Chief Commercial Officer, Greg Siller, on board and looking more importantly to the second half of the year and beyond, we have focused and reengaged our field team very intensely on patient trial growth and referral physician education. While it’s early, we’ve seen some promising initial signs and responsiveness to those efforts.”

Going forward, Thornal sees Nevro focusing on three pillars to improve commercial execution: top talent and optimized field teams, expanding indications and launching HFX spinal cord stimulation system line extensions such as HFX iQ, and scaling manufacturing in Costa Rica.

Thornal said in the news release that it would take time for the company’s efforts to take effect. “However, we believe these changes will generate significant future returns, including improved revenue growth, enhanced margins, and increased operating leverage, setting us up for success in 2024 and beyond.”

Truist analysts Richard Newitter, Samuel Brodovsky and Lin Zhang described the new guidance as a deck clearing that will lower the bar at Nevro: “We stay at Hold as we see NVRO as a show-me story that could take time for a valuation re-rate; however, we do think downside from here should be limited.”

Filed Under: Business/Financial News, Featured, MassDevice Earnings Roundup, Neuromodulation/Neurostimulation, News Well, Pain Management, Wall Street Beat