GET DAILY SIGNALSNeuronetics (STIM) Narrows Losses and Expands Margins in Q3
Key Takeaways
- Total revenue rose 12.5% year over year to $41.96 million, ahead of consensus estimates near $40.9 million.
- Net loss narrowed sharply to $1.7 million, or $0.02 per share, from $9.0 million, or $0.13 per share, in the prior-year quarter.
- Gross margin expanded to 52.2% from 45.9%, while adjusted EBITDA turned positive at $1.9 million.
- Greenbrook clinic revenue grew 20.1% to $26.2 million, and NeuroStar revenue increased 1.8% to $15.8 million on record capital system sales.
- Full-year 2026 revenue guidance was maintained at $160 million to $164 million, while the gross margin outlook was raised to 49%–50%.
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Earnings Context and Its Significance
Neuronetics sits at the intersection of medical technology and mental health care, offering its NeuroStar Advanced Therapy system alongside the Greenbrook clinic network for transcranial magnetic stimulation and related treatments. This quarter’s update is noteworthy because investors are tracking whether the company can translate top-line growth into sustainable profitability and better cash flow following the December 2024 Greenbrook acquisition. The third quarter showed clear advancement: margins improved, operating costs declined, and adjusted EBITDA moved into positive territory. With the NeuroStar commercial model shifting toward purchase and lease options, these results provide a useful checkpoint on management’s integration and cost-control efforts. I also checked this using Tickeron’s AI Screener to compare the stock against peers in the sector.
Quarterly Results in Detail
For the third quarter ended September 30, 2026, Neuronetics posted total revenue of $41.96 million, a 12.5% increase from $37.3 million in the same period last year and above analyst expectations of about $40.9 million. Greenbrook clinic revenue climbed 20.1% to $26.2 million, while NeuroStar revenue edged up 1.8% to $15.8 million, supported by record capital system sales that helped offset softer physician revenue during the commercial transition.
Gross margin rose to 52.2% from 45.9% a year earlier. Operating expenses dropped 12.6% to $21.3 million from $24.4 million, driven mainly by reduced sales and marketing spend. The company recorded operating income of $5.0 million versus an operating loss of $7.3 million in the prior-year quarter. Net loss attributable to stockholders narrowed to $1.7 million, or $0.02 per share, compared with $9.0 million, or $0.13 per share, previously. Adjusted EBITDA reached a positive $1.9 million, up $6.6 million from a $4.7 million loss.
Cash and equivalents totaled $27.9 million at quarter end, including $22.9 million in cash and $5.8 million in restricted cash. Management reaffirmed full-year 2026 revenue guidance of $160 million to $164 million, lifted the gross margin target to 49%–50%, and tightened its expected cash usage from operations and investing activities.
Investor Reaction and Sentiment
Coming into the earnings period, attention centered on Neuronetics’ progress toward profitability and cash-flow stability. The quarter delivered several encouraging signs: revenue exceeded forecasts, the loss per share was much narrower than anticipated, gross margin expanded, and the business generated positive cash flow from operating and investing activities. The move to positive adjusted EBITDA stands out for a company that has long reported losses. Investors also noted the unchanged full-year revenue range and the upgraded gross margin outlook as confirmation that cost discipline is taking hold. Key elements for ongoing interpretation include the sustainability of Greenbrook’s clinic growth, the NeuroStar model transition, and the ability to limit cash consumption through year-end.
Looking Ahead and Items to Watch
Going forward, the focus will be on whether Neuronetics can maintain this improving path. Management held full-year 2026 revenue guidance steady at $160 million to $164 million while raising the gross margin target to 49%–50%, indicating a favorable shift in the mix of capital equipment and clinic services.
Operational developments worth tracking include a 510(k) submission to the FDA for an accelerated TMS protocol and a distribution agreement with Wave Neuroscience to combine its MeRT system with NeuroStar. These steps could enlarge the patient base and broaden the therapy offering over time.
Cash management stays central. The company expects cash flow from operating and investing activities of negative $10 million to $12 million for the full year and aims for limited or no net cash use in the second half. Continued rollout of SPRAVATO across Greenbrook clinics and the contribution from newly hired sales representatives, expected to become meaningful by mid-2027, will help show whether revenue growth aligns with profitability targets.
AI Tools in My Research Process
One resource I turn to regularly when reviewing earnings and sector trends is Tickeron’s AI Screener. It helps me quickly filter stocks and ETFs by technical patterns, fundamentals, and performance metrics, which adds efficiency when monitoring names like this one alongside broader market opportunities.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
STIM's RSI Indicator ascends from oversold territory
The RSI Oscillator for STIM moved out of oversold territory on October 20, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 40 similar instances when the indicator left oversold territory. In 37 of the 40 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 26, 2026. You may want to consider a long position or call options on STIM as a result. In 65 of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 80%.
The Moving Average Convergence Divergence (MACD) for STIM just turned positive on October 22, 2026. Looking at past instances where STIM's MACD turned positive, the stock continued to rise in 31 of 34 cases over the following month. The odds of a continued upward trend are 90%.
STIM moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +31.31% 3-day Advance, the price is estimated to grow further. Considering data from situations where STIM advanced for three days, in 227 of 257 cases, the price rose further within the following month. The odds of a continued upward trend are 88%.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 47 of 53 cases where STIM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 89%.
The 10-day moving average for STIM crossed bearishly below the 50-day moving average on October 01, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 10 of 11 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 90%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where STIM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 90%.
STIM broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for STIM entered a downward trend on October 26, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 26 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (11.547) is normal, around the industry mean (4.338). P/E Ratio (-6.291) is within average values for comparable stocks, (1.324). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (11.253). Dividend Yield (0.000) settles around the average of (0.010) among similar stocks. P/S Ratio (1.250) is also within normal values, averaging (40.124).
The Tickeron Price Growth Rating for this company is 49 (best 1 - 100 worst), indicating steady price growth. STIM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 83 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 99 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. STIM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
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General Information
a developer of non-invasive therapies for psychiatric and neurological disorders
Industry MedicalNursingServices