Neuronetics Inc (NASDAQ:STIM) saw its stock rise 3.5% on Friday following the initiation of coverage by B.Riley with a Buy recommendation and a $5.00 price target.
Madison El-Saadi, the B.Riley analyst who initiated coverage, framed the call around two corporate developments: the company’s acquisition of Greenbrook in late 2024 and what the analyst characterized as a management reset in 2026. The $5.00 target represents roughly 70% upside relative to prevailing share prices, according to the analyst’s note.
El-Saadi argued that Greenbrook’s revenue trajectory and operating leverage could translate disproportionately into earnings for Neuronetics. That dynamic, the analyst said, supports the idea of revaluing STIM from a leveraged transcranial magnetic stimulation (TMS) device company to a scaled interventional psychiatry platform that combines devices and services.
The analyst highlighted specific attributes of Greenbrook that underpin this view: organic mid-teens revenue growth and significant unused capacity. Those elements, B.Riley suggested, position Neuronetics to capture a larger share of expanding demand and to benefit from what the firm described as a psychedelic-driven shift in interventional psychiatry.
According to the coverage, the timing of this transformation aligns with accelerating commercial adoption, improving payer acceptance, and growing specialist training - factors that could collectively drive a new wave of interventional psychiatry. B.Riley also emphasized that covenant resolution and sustained positive adjusted EBITDA would be important for supporting a higher valuation multiple for Neuronetics’ combination of devices and services.
On a relative basis, the analyst noted that STIM is trading at about 1.5x estimated FY28 enterprise-value-to-sales, compared with roughly 2.4x for a blended peer group. The $5.00 price target is framed as a normalization toward that peer benchmark, with only limited upside in the base case assumed from the psychedelics opportunity.
B.Riley did identify a scenario in which psychedelic-related approvals could add material upside. Specifically, the note referenced potential COMP360 approval in 1H27E and suggested that a sequence of subsequent approvals across the psychedelic category could justify a premium multiple - though the coverage did not ascribe significant contribution from that pathway to the base $5.00 target.
Bottom line - B.Riley initiated coverage on STIM with a Buy rating and a $5.00 target, citing Greenbrook-driven revenue growth, unused capacity and the potential for re-rating as factors that could materially improve earnings and valuation.