Volatility remains elevated this morning, at the start of the final trading session of this wacky week. The Reddit Rally continues to shake things up. Highly shorted stocks are being lifted to unprecedented levels. Redditors from r/wallstreetbets are urging members to hold strong and focus on GameStop (GME) which is up 2100% so far for 2021 (you read that right). There are other tickers which are also under focus, here is the list:
- AMC, CVM, EXPR, FOSL, GME, NOK, BB, BBBY, FIZZ, GSX, IRBT, NCMI, TR, UONE, VIR, NAK, NAKD, DDS, KOSS
In today’s trade alert, we’ll focus on one small-cap biomedical device company that fell under pressure due to institutional short sellers, dragging the price down. The pros didn’t budge though. In fact since the attack, analyst estimate revisions have been positive.
Shares in Nevro Corp (NVRO) stumbled recently after the medical devices company issued some disappointing preliminary fourth-quarter results and took a shot from a short seller.
COVID-19 led to declines in U.S. clinical trials and revenue in the fourth quarter. Meanwhile, Scorpion Capital announced a short position in the stock on Jan. 7, alleging that the company engages in fraudulent practices regarding its spinal cord stimulation devices.
And yet, the analysts covering the company didn’t budge.
The 15 analysts tracked by S&P Global Market Intelligence are almost entirely behind the bull case, with 10 Strong Buys, 2 Buys and 2 Holds. But NVRO does stand out among the pros’ best small-cap stocks for 2021 because of its modest $176.36 average price target, which implies just 7% upside from current prices.
One factor pushing analyst estimates higher is Nevro Corp’s presentation earlier this month, at the 2021 North American Neuromodulation Society (“NANS”). The company announced positive results from data supporting the use of HF10® therapy for patients with chronic pain. The presentations also included the results of Painful Diabetic Neuropathy (“PDN”) and Non-Surgical Refractory Back Pain (“NSRBP”) randomized clinical trials.
D. Keith Grossman, CEO of Nevro said, “No other SCS treatments have demonstrated such positive results in treating PDN and NSRBP patients, and we believe there is a significant opportunity to expand an innovative treatment option to patients who are unable to find relief with currently available options.”
Reiterating the outperform rating on the stock, SVB Leerink, being bullish on PDN, increased its price target to $210 from $190, citing upside potential in NSRBP.
Canaccord Genuity is impressed by both datasets maintaining a buy rating with the price target increased to $203 from $167, noting, however, that the company has ‘more work to do in NSRBP.’
Investors should watch the analyst community closely. These higher price target moves are an important indicator of what could be coming for NVRO. The company is to report earnings on February 24th.
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