Neuronetics Stock Gains After B. Riley Initiates With 'Buy' Rating, Cites Transformation

Shares of Neuronetics Inc. (NASDAQ: STIM) rose 3.5% on Friday after B. Riley initiated coverage on the stock with a Buy rating and a $5.00 price target, citing a fundamental shift in the company's business model following key strategic moves.

The Analyst's Call

B. Riley analyst Madison El-Saadi launched coverage following Neuronetics' acquisition of Greenbrook at the end of 2024 and a management restructuring in 2026. The firm's $5.00 price target implies a potential upside of approximately 70% from the stock's current trading levels.

According to the analyst note, B. Riley believes the market will begin to re-evaluate Neuronetics. The firm sees it transforming from a highly leveraged transcranial magnetic stimulation (TMS) device company into a scaled, integrated platform for interventional psychiatry.

A Strategic Transformation

The acquisition of Greenbrook is central to this thesis. B. Riley highlighted several key benefits from the deal that are expected to drive growth and profitability:

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• It provides Neuronetics with mid-double-digit organic growth and significant idle capacity.
• It positions the company to benefit from potential breakthroughs in psychedelic-assisted therapies.
• Revenue growth and operational leverage from the acquisition are expected to translate disproportionately into earnings.

This shift comes amid favorable industry tailwinds, including accelerating commercial adoption, improving insurance reimbursement, and an expansion of specialist physician training, which are collectively driving a new wave of growth in interventional psychiatry, the analyst noted.

Valuation and Outlook

B. Riley stated that the resolution of debt covenant issues and sustained positive adjusted EBITDA should support a higher valuation multiple for the combined device and service platform. The analyst calculated that Neuronetics currently trades at an enterprise value-to-sales multiple of approximately 1.5x on 2028 estimates, compared to a peer average of about 2.4x.

The $5.00 price target reflects a valuation re-rating toward that peer benchmark. El-Saadi also noted that this target includes minimal contribution from the potential of psychedelic therapies. A potential approval for COMP360 in the first half of 2027, followed by similar products, could support an even higher valuation premium in the future.