Why Is NeuroPace (NPCE) Down 0.4% Since Last Earnings Report?

It has been about a month since the last earnings report for NeuroPace, Inc. (NPCE). Shares have lost about 0.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NeuroPace due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for NeuroPace, Inc. before we dive into how investors and analysts have reacted as of late.

NPCE Q2 Earnings Beat Estimates on RNS Growth, ’26 Revenue View Up

NeuroPace reported a second-quarter 2026 loss per share of 18 cents, compared with a loss of 30 cents in the year-ago period. The figure beat the Zacks Consensus Estimate by 5.3%.

NPCE's Q2 Revenues Show Core Momentum

NeuroPace registered revenues of $22.8 million in the second quarter, up 17.1% year over year. Growth was led by the RNS System, while active prescribers, accounts and the patient pipeline reached record highs. The figure surpassed the Zacks Consensus Estimate by 0.6%.

RNS System revenues totaled $22.5 million, up 21.3% year over year. The increase primarily reflected more units sold, driven by a higher number of initial implants and replacement procedures.

Service revenues were $302,000, down from $937,000 a year ago. Following the DIXI Medical wind-down, NeuroPace now presents that business as discontinued operations.

NPCE’s Margin Analysis

In the quarter under review, NeuroPace’s adjusted gross profit increased 16.1% year over year to $19 million. Adjusted gross margin contracted 60 basis points to 83.4%, primarily due to slightly higher material costs, partly offset by favorable pricing.

Sales and marketing expenses increased 5.5% year over year to $12.1 million, while research and development expenses rose 0.8% to $6.9 million. General and administrative expenses decreased 17.2% year over year to $5.0 million.

Adjusted operating expenses of $21.9 million increased 2.5% year over year.

The adjusted operating loss narrowed to $2.8 million from $5 million in the prior-year quarter.

NPCE’s Financial Position

NeuroPace ended second-quarter 2026 with total cash, cash equivalents and short-term investments of $51.7 million, compared with $53.9 million at the end of first-quarter 2026.

Cumulative net cash used in operating activities at the end of second-quarter 2026 was $9.8 million compared with $9.6 million a year ago.

NeuroPace Raises 2026 Revenue Outlook

Management raised full-year 2026 revenue guidance to $99.5-$101.5 million from $99-$101 million. The increase reflects expected service revenues of about $1 million, up from roughly $500,000 previously, while the RNS revenue growth outlook remains 21%-23%. The Zacks Consensus Estimate is pegged at $100.3 million.

The adjusted gross margin is now expected to be 82%-83%, up from the previous guidance of 81.5%-82.5%.

Adjusted operating expenses are projected at $90 million-$92 million, unchanged from the prior outlook and excluding approximately $10 million in stock-based compensation.

The adjusted EBITDA loss is now expected in the range of $7.5 million-$8.5 million, an improvement from the previous guidance of a loss between $8.5 million and $9.5 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -40% due to these changes.

VGM Scores

Currently, NeuroPace has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, NeuroPace has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NeuroPace is part of the Zacks Medical - Instruments industry. Over the past month, IQVIA Holdings (IQV), a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended June 2026 more than a month ago.

IQVIA reported revenues of $4.37 billion in the last reported quarter, representing a year-over-year change of +8.7%. EPS of $3.15 for the same period compares with $2.81 a year ago.

For the current quarter, IQVIA is expected to post earnings of $3.25 per share, indicating a change of +8.3% 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 #3 (Hold) for IQVIA. Also, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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