HCW starts NeuroMetrix at buy; PT $5

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H.C. Wainwright launched coverage of NeuroMatrix (NASDAQ:NURO) with a “buy” rating and price target of $5. The stock closed at 68 cents on Dec. 24.

NeuroMetrix is a healthcare technology company that has two products on the market: Quell, an over-the-counter wearable device relying on neuro-stimulation technology for chronic pain relief, and DPNCheck, a point-of-care test for diabetic peripheral neuropathy.

As a commercial stage company with $17.1-million in sales in 2017, “we believe NeuroMetrix’s valuation is underappreciated at the current market capitalization of approximately $5-million,” writes analyst Andrew Fein.

Citing the current stock price, he said any positive news from the company “may be able to move the needle, and we believe there is plenty of room for the stock to appreciate,” he added.

Among other things, he said the macro environment for addressing the opioid crisis, and a pressing need to limit opioid use while seeking alternative pain management options bode well for sales of Quell, which is the major driver of the topline growth.

Mr. Fein pointed out that the company’s current price-to-sales (P/S) ratio is less than 1.0, well below the benchmark P/S ratio of 6.4 for medical equipment and supplies industry in the third quarter of 2018.

“As management noted over the past year, NeuroMetrix’s primary business goal is to become profitable on an operating basis in 2020,” he added.

Stephen Kilmer