It has been about a month since the last earnings report for NeuroPace, Inc. (NPCE). Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NeuroPace due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
NeuroPace Reports Q4 Loss, Beats Revenue Estimates
NeuroPace reported a loss per share of 8 cents in the fourth quarter, compared to 18 cents in the year-ago period. The company beats Zacks Consensus Estimate of a loss of 14 cents per share by 41.48%.
Revenue in the fourth quarter 2025 reached $26.6 million, up 24% year over year, reflecting strong RNS System sales of $22.4 million (up 26%) alongside $890,000 in service revenue and $3 million from DIXI Medical wind-down. The revenues also beat the Zacks Consensus Estimate by 2.47%
Operating expenses totaled $22.3 million, up 13% year over year (Sales & Marketing $10.9 million; R&D $ million; G&A $4.4 million). Importantly, adjusted EBITDA turned positive at $0.9M, marking a second consecutive quarter of positive adjusted EBITDA. Q4 marked all-time highs in prescribers, implanters, and patient funnel, with contributions from community pathways expanding beyond Level 4 centers.
Gross margin expanded to 77.4%, up 200 bps year over year, with RNS gross margin at 80.5%, up 40 bps, supported by mix shift, manufacturing efficiencies, and pricing conversion.
Financial Position
NeuroPace ended fourth quarter of 2025 with $61.1M in cash and short-term investments, compared to $60 million in the third quarter. The fourth quarter generated positive operating cash flow of $500 ,000 and positive free cash flow of $400,000, demonstrating improving cash generation. Long-term debt stood at $58.9 million.
2026 Outlook
For 2026, management reiterated total revenue guidance of $98million-$100 million on a continuing-operations basis, with RNS growth of 20%-22%, excluding any IGE contribution and DIXI. Adjusted gross margin is expected at 81.5%-82.5%, supported by ongoing pricing discipline and manufacturing efficiencies. Adjusted operating expenses are guided to $90 million - $92million, with adjusted EBITDA expected to be a loss of approximately $9 million-$1 milliom due to front-loaded first-half spending and typical procedural seasonality. First quarter 2026 revenue is guided to $21 million-$22 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 20.97% due to these changes.
VGM Scores
At this time, NeuroPace has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a score of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise NeuroPace has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
NeuroPace belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Avanos Medical (AVNS), has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.
Avanos Medical reported revenues of $180.9 million in the last reported quarter, representing a year-over-year change of +0.7%. EPS of $0.29 for the same period compares with $0.43 a year ago.
For the current quarter, Avanos Medical is expected to post earnings of $0.23 per share, indicating a change of -11.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Avanos Medical. Also, the stock has a VGM Score of A.
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SeeNeuroPace, Inc. (NPCE) : Free Stock Analysis Report
AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
