Nevro's C-Suite, Board Changes Should 'Mark The Turnaround Of The Organization,' BMO Says In Upgrade

Nevro Corp (NYSE: NVRO) announced a series of board changes and the appointment of a new CEO after the close Tuesday. 

The medical device company's stock was surging Wednesday on the news. 

The changes at the helm and to the board come in the wake of pressure from Broadfin Capital, which holds a significant stake in Nevro. 

The Analyst

BMO Capital Markets analyst Joanne Wuensch upgraded Nevro from Market Perform to Outperform and increased the price target from $46 to $67.

The Thesis

Despite the value of Nevro's franchise, successive downward revisions and management missteps were keeping BMO on the

"While it suspended guidance, and turnarounds do take time, this is a very good step in our view," the analyst said. 

Newly appointed CEO Keith Grossman, who replaced Rami Elghandour at the helm, is a medical device industry veteran, she said. 

The appointment should give the company a fresh perspective and reinvigorate its growth profile in a still-strong spinal cord stimulation market, Wuensch said. 

"We suspect that this assignment will mark the turnaround of the organization, but also stir the pot on how long it will stay as an independent company given his history." 

The two independent directors joining the board — Elizabeth Weatherman and Kevin O'Boyle — have a long list of board positions and "long and heralded" stints in the medical device industry on their résumés, according to BMO. 

The Price Action

Nevro shares were rallying 33.21 percent to $59.64 at the time of publication Wednesday. 

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