Nevro Corporation (NYSE:NVRO) is well-positioned for growth in the coming quarters, thanks to its R&D advantage. The optimism generated by a strong first-quarter 2023 performance and the sustained strength of its flagship Senza platform is projected to contribute even more. However, fierce rivalry and reliance on third-party payors remain.

This stock has lost 40.3% in the last year, compared to the industry’s 20.2% gain and the S&P 500’s 19.9% gain.

The market capitalization of the well-known multinational medical equipment company is $901.9 million. The company plans to sustain its current performance and anticipates 31.5% growth for 2024. Earnings for Nevro were above the Consensus Estimate in three of the previous four quarters and missed once, with a 5.6% average earnings surprise.

R&D Advantage: Nevro intends to improve patient outcomes and broaden patient access to HF10 therapy through Senza improvements and the development of novel indications, which increases our optimism. Since the initial Senza system’s release, the company has launched a number of product updates, such as active anchoring with increased performance, among others. Senza is still being improved by the company in order to improve its performance.

During the company’s first-quarter earnings call in April, Nevro’s management indicated that the two-year results from its non-surgical back pain trial had been submitted for publication.

Senza’s continuous strength: We are confident about Nevro’s flagship Senza platform’s continued strength. Based on findings from the company’s SENZA-RCT and European trials, as well as the SENZA-PDN (Painful Diabetic Neuropathy) and SENZA-NSRBP (non-surgical refractory back pain) RCTs, Nevro believes 10 kHz therapy may be an appealing treatment choice for patients.

Nevro began the full-market release of the Senza HFX iQ System in the United States in March, which has garnered positive comments from physicians and patients.

Strong Q1 performance: Nevro’s first-quarter 2023 performance was stronger than predicted. The company’s overall top-line results improved, and domestic revenues increased. There was also an increase in total permanent implant surgeries and trial procedures in the United States. The advancement of PDN trial protocols in the United States is also encouraging.

Downsides Reliance on Third-Party Payors: Nevro’s marketing performance is heavily reliant on whether U.S. and worldwide government health administrative agencies, commercial health insurers, and other organizations effectively cover and compensate customers for the cost of its products. Third-party payors must provide acceptable coverage and payment for Senza spinal cord stimulation operations in order for Nevro’s goods to be accepted by its consumers.

Nevro competes in a highly competitive medical device sector that is undergoing a technological transformation. The company’s success is dependent in part on its ability to create a competitive position in the neuromodulation industry by gaining widespread market acceptance for its HF10 therapy and Senza devices for the treatment of recognized chronic pain conditions.

Estimate Development

For 2023, Nevro has had a downward trend in estimate revisions. The Consensus Estimate for its loss has widened from $2.43 per share to $2.51 in the last 90 days.

The Consensus Estimate for the company’s second-quarter 2023 revenues is $109.8 million, implying a 5.4% increase over the previous quarter’s reported figure.

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