Zacks Investment Research has recently initiated coverage of NeurAxis, Inc. NRXS, assigning a "Neutral" recommendation to the company's shares. This assessment comes amid a mixed outlook for the company, which has been making notable strides in the neuromodulation therapies space despite industry challenges.
NRXS, headquartered in Carmel, IN, specializes in developing neuromodulation therapies to address chronic conditions, particularly in pediatric populations. NeurAxis' flagship product, the IB-Stim, is a non-surgical, FDA-cleared device designed for treating functional abdominal pain associated with irritable bowel syndrome in adolescents aged 11-18 years.
NeurAxis reported a 16% year-over-year increase in unit sales in the second quarter of 2024, alongside securing $9.1 million in funding, which strengthens its financial position. The company’s coverage has surged from 4.5 million lives in May 2023 to approximately 22.5 million in June 2024, with expectations to exceed 50 million by the year-end.
On the financial front, NeurAxis reported an operating loss of $2.2 million in the second quarter of 2024, nearly doubling from the previous year. With a cash reserve of $1.8 million as of June 30, 2024, and a burn rate of $400,000 to $500,000 per month, the company may need to secure additional financing to sustain its growth trajectory.
The research report highlights several key factors that could drive NeurAxis’ future growth. These include its rapid expansion of insurance coverage for the IB-Stim device, which addresses a primary barrier to revenue growth — reimbursement from insurers. As more insurers adopt coverage, NRXS anticipates accelerated revenue growth, especially in the latter half of 2024 and into 2025. Additionally, NeurAxis is advancing its product pipeline with the expected commercialization of the Rectal Expulsion Device for pelvic floor dysfunction by late 2024. This product, along with the planned expansion of IB-Stim’s label to cover a broader age range, could significantly boost the company’s market opportunity.
However, potential investors should consider certain risks outlined in the report. NeurAxis is currently grappling with operational losses and a high cash burn rate, along with heavy reliance on the continued expansion of insurance coverage to drive revenue growth. Delays in regulatory approvals for new products could further hinder NRXS’ growth trajectory. The company faces competitive pressures in the MedTech space, especially from established players with broader product offerings.
NeurAxis’ stock has significantly underperformed its industry peers and the broader market over the past year. The valuation metrics for the company reflect that while the market may have high expectations for NRXS’ future growth, it also implies a risk if the company fails to meet these expectations.
For a comprehensive analysis of NeurAxis’ financial health, strategic initiatives, and market positioning, you are encouraged to view the full Zacks research report. This in-depth report provides a detailed discussion of the company's operational strategies, financial performance, and the potential risks and opportunities that lie ahead.
Read the full Research Report on NeurAxis here>>>
Note: Our initiation of coverage on NeurAxis, which has a modest market capitalization of $19.8 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.
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Neuraxis, Inc. (NRXS): Free Stock Analysis Report
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