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1. Company Snapshot

1.a. Company Description

NeuroPace, Inc.operates as a medical device company in the United States.It develops and sells RNS system, a brain-responsive neuromodulation system for treating medically refractory focal epilepsy by delivering personalized real-time treatment at the seizure source.


The company's RNS system also records continuous brain activity data; and enables clinicians to monitor patients in person and remotely.It sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures.The company was incorporated in 1997 and is headquartered in Mountain View, California.

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1.b. Last Insights on NPCE

NeuroPace, Inc.'s recent performance was driven by strong revenue growth, with Q3 2025 revenue reaching $27.4 million, up 30% from the same period last year. The company's RNS System revenue grew 31% year-over-year to $22.6 million. Additionally, NeuroPace raised its 2025 revenue guidance to $94-$98 million. The company also reported a narrower-than-expected quarterly loss of $0.11 per share. Increased investor interest is evident, with Y Intercept Hong Kong Ltd acquiring a new stake in the company.

1.c. Company Highlights

2. NeuroPace's Q3 2025 Earnings: A Record Quarter

NeuroPace reported a record revenue of $27.4 million for Q3 2025, representing a 30% year-over-year growth, primarily driven by RNS initial implants. The RNS revenue reached $22.6 million, a 31% year-over-year increase, with broad-based growth across geographies, customers, and programs. The company's total gross margin for the quarter was 77.4%, compared to 73.2% in the prior year quarter. The actual EPS came out at -$0.11, beating estimates of -$0.2. The company's adjusted EBITDA was positive $0.1 million, a significant milestone, reflecting the scalability of its model and progress in disciplined expense management.

Publication Date: Nov -29

📋 Highlights
  • Record Revenue Growth: Q3 2025 revenue hit $27.4M (+30% YoY), driven by RNS system with $22.6M revenue (+31% YoY).
  • Positive Adjusted EBITDA: Achieved $0.1M positive EBITDA, reversing losses of $1.6M (Q3 2024) and $3.5M (Q2 2025).
  • Full-Year Guidance Raised: Revenue guidance lifted to $97M–$98M (up from $94M–$98M), with gross margin target of 76–77%.
  • RNS Margin Strength: RNS gross margin exceeded 80% in Q3, supporting 2026 projections where RNS will dominate revenue.
  • Future Growth Catalysts: NAUTILUS study, pediatric indication (post-2025 FDA submission), and 20%+ core growth guidance for 2026.

Financial Performance

The company's financial performance was strong, with operating expenses growing 21%, below the revenue growth of 30%. Total operating expenses for 2025 are expected to range between $94 million and $95 million. The company raised its full-year revenue guidance to a range of $97 million to $98 million, and its full-year gross margin guidance to a range of 76% to 77%. As Joel Becker stated, "the third quarter was a record quarter for NeuroPace, driven by the execution of the company's strategy and demonstrated strength across the business."

Valuation Metrics

Looking at the valuation metrics, NeuroPace's P/S Ratio is 5.74, and EV/EBITDA is -38.92. The negative EV/EBITDA is due to the company's adjusted EBITDA being positive but still having a negative net income. The ROE is -116.69%, indicating that the company is not yet profitable. However, the company's progress in achieving positive adjusted EBITDA is a positive sign. With the current valuation multiples, the market is pricing in a significant growth potential for the company.

Growth Prospects

The company is guiding for a 20% plus growth in the core focal epilepsy indicated business in 2026, which will serve as the foundation for the business. The R&D pipeline is expected to add to this core growth. With the NAUTILUS study demonstrating the safety and effectiveness of the RNS System, and the company working with the FDA to finalize the real-world evidence and protocol for its pediatric indication, there are multiple growth drivers on the horizon.

3. NewsRoom

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Baird Medical Appoints Mark Saxton as U.S. CEO; Taps Veteran from NeuroPace, Smith + Nephew, and Covidien to Lead Commercial Expansion

Dec -03

Source: prnewswire.com

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NeuroPace to Highlight Life-Changing Outcomes and AI-Powered Confident Care at the 2025 American Epilepsy Society (AES) Annual Meeting

Dec -02

Source: businesswire.com

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NeuroPace Announces Favorable Medicare Reimbursement Increases for RNS System Physician and Hospital Outpatient Services

Nov -24

Source: businesswire.com

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Y Intercept Hong Kong Ltd Takes Position in NeuroPace, Inc. $NPCE

Nov -06

Source: defenseworld.net

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NeuroPace, Inc. (NPCE) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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NeuroPace, Inc. (NPCE) Reports Q3 Loss, Tops Revenue Estimates

Nov -05

Source: zacks.com

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NeuroPace Reports Third Quarter 2025 Financial Results and Increases 2025 Revenue Guidance

Nov -04

Source: businesswire.com

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NeuroPace to Report Third Quarter 2025 Financial Results on November 4, 2025

Oct -22

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.27%)

6. Segments

Medical Device

Expected Growth: 9.27%

NeuroPace's 9.27% growth in medical devices is driven by increasing demand for epilepsy treatment, advancements in neurostimulation technology, and expanding adoption of RNS System in the US and Europe. Growing awareness of seizure control and favorable reimbursement policies also contribute to the growth.

7. Detailed Products

RNS System

A implantable neurostimulator that treats medically refractory epilepsy by detecting and responding to abnormal brain activity.

NeuroPace Seizure Advisory System

A cloud-based platform that provides personalized seizure forecasting and alerts to patients and caregivers.

RNS System with LivaNova's VNS Therapy

A combination of the RNS System with VNS Therapy, a non-pharmacological treatment for epilepsy.

8. NeuroPace, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

NeuroPace, Inc. has a moderate threat of substitutes due to the availability of alternative treatments for epilepsy, such as medications and surgery. However, the company's RNS System is a unique and effective solution that provides a competitive advantage.

Bargaining Power Of Customers

NeuroPace, Inc. has a low bargaining power of customers due to the specialized nature of its product and the limited number of customers. This gives the company more control over pricing and sales.

Bargaining Power Of Suppliers

NeuroPace, Inc. has a moderate bargaining power of suppliers due to the availability of multiple suppliers for its components and materials. However, the company's reliance on a few key suppliers for critical components may limit its negotiating power.

Threat Of New Entrants

NeuroPace, Inc. has a high threat of new entrants due to the growing demand for neurostimulation devices and the potential for new companies to enter the market with innovative products.

Intensity Of Rivalry

NeuroPace, Inc. operates in a moderately competitive market with a few established players. The company's unique product and strong marketing efforts help to differentiate it from competitors, but the market is still competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.93%
Debt Cost 11.76%
Equity Weight 26.07%
Equity Cost 14.26%
WACC 12.41%
Leverage 283.63%

11. Quality Control: NeuroPace, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
LENSAR

A-Score: 5.7/10

Value: 8.8

Growth: 5.0

Quality: 5.8

Yield: 0.0

Momentum: 10.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Semler Scientific

A-Score: 4.9/10

Value: 7.5

Growth: 7.3

Quality: 7.2

Yield: 0.0

Momentum: 6.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
NeuroPace

A-Score: 4.3/10

Value: 6.4

Growth: 4.8

Quality: 3.9

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Quipt Home Medical

A-Score: 3.8/10

Value: 8.7

Growth: 6.7

Quality: 3.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Talis Biomedical

A-Score: 3.7/10

Value: 8.2

Growth: 4.6

Quality: 4.4

Yield: 0.0

Momentum: 3.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Myomo

A-Score: 2.9/10

Value: 8.0

Growth: 4.7

Quality: 4.3

Yield: 0.0

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

16.43$

Current Price

16.43$

Potential

-0.00%

Expected Cash-Flows