On Wednesday, H.C. Wainwright adjusted its outlook on shares of electroCore Inc. (NASDAQ: ECOR), raising the price target to $25.00 from the previous $22.00, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock has shown remarkable momentum with a 141% gain over the past six months, while analyst targets now range from $22 to $30.
The revision comes in the wake of electroCore’s announcement on Tuesday that it has entered into a definitive merger agreement to acquire NeuroMetrix , Inc (NASDAQ: NASDAQ:NURO), which is a commercial stage company that develops non-invasive medical devices aimed at treating fibromyalgia and chronic pain.
The analyst at H.C. Wainwright has updated their financial model for electroCore to reflect several changes following the acquisition news. These include the incorporation of expected revenues from NeuroMetrix's Quell product line starting in the second quarter of 2025. Additionally, the analyst has made adjustments to the operating expenses in their model.
Furthermore, the discount rate applied in the valuation of electroCore has been lowered to 8.0%. This change reflects the analyst's confidence in the management’s ability to execute sales effectively and maintain operational excellence.
The merger is seen as a strategic move by electroCore to expand its product offerings and enhance its position in the medical device market for pain management. The Quell product line from NeuroMetrix is expected to contribute to electroCore's revenue streams and bolster its market presence in the coming years.
The new 12-month price target of $25 per diluted share represents the analyst's revised expectation of the company's future performance, taking into account the potential benefits of the merger with NeuroMetrix.
In other recent news, electroCore has announced record Q3 revenues of $6.6 million, marking a significant 45% increase from the same period last year. This financial performance matches the consensus estimates of $6.5 million in revenues, with a net loss of $0.31 per share. Furthermore, H.C. Wainwright has maintained a Buy rating on electroCore, raising the price target to $22 from $15.
The earnings call also revealed a reduction in the net loss for the quarter to $2.5 million, showing substantial improvement from a $4 million loss in Q3 2023. Sales to the Veterans Administration (VA) remain a major growth driver for the company, showing a 75% increase to $4.8 million.
In recent developments, electroCore anticipates continued revenue growth and a path to positive adjusted EBITDA and cash flow early next year. The company's future strategies include expanding the TAC-STIM product line and exploring additional indications for gammaCore therapy. Lastly, electroCore is in ongoing FDA discussions for a PTSD label for TAC-STIM.
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