Analyst: NeuroMetrix Benefits From Alternative Pain Management Trend

NeuroMetrix Inc NURO is a commercial-stage health care technology company with two products on the market: Quell, an OTC wearable device relying on neurostimulation technology for chronic pain relief; and DPNCheck, a point-of-care diabetic peripheral neuropathy test.

With $17.1 million in sales in 2017, NeuroMetrix’s market capitalization of approximately $5 million appears low, according to H.C. Wainwright.

The Analyst

Analyst Andrew Fein initiated coverage of NeuroMetrix with a Buy rating and $5 price target.

The Thesis

NeuroMetrix’s stock seems underappreciated, and any positivity from the company could lend upside to its share price, Fein said in the Wednesday initiation note. (See the analyst's track record here.) 

Quell 2.0, which was launched in the U.S. in September, could boost market adoption given that the new device is smarter, half the size of the original Quell device and runs on an improved app, the analyst said. Quell 2.0 is expected to be launched outside the U.S. in 2019 and beyond, he said. 

NeuroMetrix is selling Quell 2.0 to the highest-profit margin channels of e-commerce, and the company’s gross margins could expand over the next couple of years, Fein said. 

A regulatory environment that seeks to reduce new addictions through opioid use and increase the use of alternative pain management bodes well for Quell's adoption, in H.C. Wainwright's view. 

NeuroMetrix’s commercial downside and financial risks “are limited by a number of partnerships,” Fein said. 

Price Action

NeuroMetrix shares were trading up 6.12 percent to 72 cents at the time of publication Wednesday. 

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