I believe that Neurometrix Inc. (NURO) is an undervalued micro cap stock with no debt and an asymmetric risk to reward given that the long history of losses and cash burn might soon be reversed given the involvement of GSK in the company and a few promising products. The thesis could start to manifest once the 3rd generation of Quell, which is jointly financed with GSK, rolls out in the market in the next quarter. My estimate is that it could take between 2 to 5 years for the company to be consistently profitable on its own without the help of GSK, which is necessary in order for the thesis to play out fully.
Business overview
Neurometrix is a micro-cap, niche medical device company with little analyst coverage and it focuses on addressing chronic health conditions mostly dealing with chronic pain and diabetes. The company was founded by current CEO and president Shai Gozani who has a Ph.D. in Neurobiology in 1996 and also started the company back when he was still in medical school. The company has 2 principal product lines: wearable neuro stimulation therapeutic devices (to curb or reduce chronic pain) and point of care neuropathy diagnostic tests (to diagnose diabetes), and there are several products under each product line but the company is only trying to promote quell and DPNCheck, while winding down the other products such as SENSUS and Advance (although SENSUS and Advance is still necessary at the moment to generate cash flow for the company). The main focus of the company right now is to promote Quell which they perceive to have the highest growth potential.
Products Overview
The company has 4 products, 2 of which (SENSUS and Advance) they are winding down and 2 others (DPNCheck and Quell) they are trying to promote.
