BTIG initiated coverage on two companies with “buy” ratings that it believes are undervalued players in the transcranial magnetic stimulation (TMS) space. Analyst Sam Eiber assigns target prices of $5 to Neuronetics (NASDAQ:STIM) and $18 to BrainsWay (NASDAQ:BWAY).
“BrainsWay has demonstrated the ability to scale a TMS business into sustainable profitability, having now posted 11 consecutive quarters of positive adjusted EBITDA. It achieved this by transitioning toward a high-margin, recurring revenue platform that removed the upfront capital barrier constraining physician adoption, and by making minority investments in mental health clinic networks, providing those operators with growth capital to expand their footprint. That foundation sets up a clear growth path spanning new clinic partnerships with more than 200 identified targets, adjacent indications in comorbid PTSD/MDD and alcohol use disorder, and continued international expansion,” writes Mr. Eiber.
“The anticipated commercial entry of Compass Pathways’ (NASDAQ:CMPS) COMP360 psilocybin therapy could pull previously unreached patients into the interventional psychiatry ecosystem,” he adds.
On Neuronetics, Mr. Eiber writes, “Neuronetics is entering a pivotal new phase as it looks to become a key player in the rapidly evolving field of interventional psychiatry. The December 2024 acquisition of Greenbrook TMS transformed the company from a pure-play medical device manufacturer into a vertically integrated mental health platform with 93 company-operated treatment centers.”
He adds, “This platform positions STIM to benefit from what could be one of the most significant shifts in mental health treatment in a generation. Compass Pathways’ COMP360 psilocybin therapy for treatment-resistant depression (TRD) met its primary endpoint in both Phase 3 trials (COMP005 and COMP006), demonstrating statistically significant reduction in symptoms at six weeks, which was sustained through 26 weeks. An NDA submission is targeted for Q4 2026, with potential market entry in 1H27. Notably, Neuronetics has an established collaboration agreement with Compass and has already demonstrated its ability to integrate and administer novel interventional therapies through its SPRAVATO (esketamine) program.”
