Uncertainties In Nevro's Core Business Lead To Revised FY24 Projections By Oppenheimer Analyst

Oppenheimer analyst Suraj Kalia reiterated an Outperform rating on the shares of Nevro Corp. NVRO, with a price target of $40.
Nevro lowered 2Q revenue guidance to $106 million-$108 million, below the analyst's estimate of $112 million and prior guide of $110 million-$112 million.
The analyst cautioned that it is unclear if the 2Q weakness is from the core spinal cord stimulation (SCS) or Painful Diabetic Neuropathy (PDN) segments.
The analyst cautioned that core SCS weakness would be expected, but PDN weakness is worrisome.
Nevro trades at a discount to the MedTech space at ~4.0x, based on the organic SCS business's tempered recovery.
However, the analyst expects the new CEO to stabilize the ship and new product iterations/ introductions to provide call options.
Based on the above uncertainties, the analyst lowered FY23 revenue estimates to $430.1 million from the previous expectation of $450.4 million.
For FY23, the analyst sees EPS loss of $(2.94) wider than the earlier estimate of $(2.35) loss.
For FY24, the analyst lowered revenue estimates from $501.8 million to $480.8 million.
EPS for FY24 is expected to be $(2.22) loss, wider than the previous expectation of $(1.97) loss.
Price Action: NVRO shares are trading lower by 13.5% at $23.80 on the last check Tuesday.

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