On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on shares of Nevro Corp (NYSE:NYSE:NVRO), a medical device company, by lowering its price target from $8.00 to $6.00. Despite this change, the firm maintained a Neutral rating on the company's shares.
The adjustment follows observations of Nevro's potential in the painful diabetic neuropathy (PDN) market. The company is anticipated to publish sensory studies related to its PDN system at the American Diabetes Association (ADA) 2025 event.
Success in these studies could position Nevro to revive the PDN market, which it initially aimed to serve. Growth in this sector could lead to a resurgence in overall sales for Nevro, especially if PDN growth returns to the over 50% levels experienced in 2023.
Nevro has stopped providing separate financial details for its PDN segment, leaving the current state of the PDN market unclear. However, additional data could enable Nevro to reaffirm its standing as the leading spinal cord stimulation (SCS) system for PDN treatment and to expand its market share.
The PDN market represents a substantial opportunity, with devices priced around $20,000 each, implying that even minimal market penetration could significantly impact Nevro's revenue.
Despite the potential for future growth, Mizuho advises caution regarding Nevro's stock, pointing to the company's declining sales trajectory. The firm anticipates that the first signs of a turnaround could emerge once it becomes clear that U.S. trials have reached their lowest point. Additionally, the release of updated PDN data sets is seen as another possible catalyst for the company's shares.
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