Wall Street is buzzing about Neuronetics' (<a href="https://seekingalpha.com/symbol/STIM" title="Neuronetics, Inc.">STIM</a>) recent earnings call, with analysts poring over the details of their adolescent TMS approval and the success of their Better Me Guarantee Program. But buried within the transcript lies a seemingly insignificant detail, a whispered clue that might just foretell an explosive growth trajectory for the company: the power of repeat attendees at NeuroStar University (NSU).

While much of the discussion centered around the impressive 20% growth target for Better Me Guarantee participants and the potential of the adolescent market, the significance of NSU's repeat attendance phenomenon seemed to slip under the radar. Keith Sullivan, CEO of Neuronetics, casually mentioned that 20% of sites who attended previous NSU classes have sent <em>additional</em> team members to participate in the educational course.

This seemingly innocuous fact is actually a potent indicator of NSU's efficacy and its potential to supercharge Neuronetics' growth. Why? Because it unveils a powerful ripple effect that could lead to a sustained, exponential increase in utilization.

The Ripple Effect: How NSU Repeat Attendance Drives Exponential Growth

Initial Adoption and Increased Utilization: NSU attendees are learning valuable clinical techniques and best practices for utilizing NeuroStar. This knowledge translates into a significant 58% increase in utilization compared to non-NSU attendees. <br> Reference: <a href="https://seekingalpha.com/article/4600059-neuronetics-inc-stim-q1-2024-results-earnings-call-transcript">Neuronetics Q1 2024 Earnings Call Transcript</a>

Internal Advocacy and Training: The positive impact of NSU on individual team members creates internal champions for NeuroStar within the practice. These champions, having experienced the tangible benefits of the course firsthand, become advocates for sending additional team members to NSU.

Expanded Expertise and Enhanced Patient Care: As more team members within a practice receive NSU training, the collective expertise in administering NeuroStar expands. This leads to a higher standard of patient care, more effective treatment protocols, and ultimately, greater patient satisfaction.

Exponential Utilization Growth: With a larger pool of trained professionals within each practice, the capacity to treat patients with NeuroStar increases exponentially. This translates into higher utilization rates, driving treatment session revenue and propelling Neuronetics' overall growth.

The implications of this ripple effect are enormous. If even a fraction of the 20% repeat attendees convince just <em>one</em> additional site to adopt NeuroStar, the company's customer base could experience a remarkable surge. Considering that Neuronetics currently has around 1,100 to 1,200 customer sites, this could potentially add hundreds of new sites to their roster.

But the impact goes beyond just adding new customers. The ripple effect fuels a virtuous cycle: increased utilization at existing sites, fueled by expanded expertise through NSU, drives higher treatment session revenue. This financial success reinforces the value of NeuroStar, incentivizing practices to invest further in training and ultimately, adopt additional NeuroStar systems.

The Adolescent Market: A New Frontier for Explosive Growth

The potential for growth becomes even more staggering when we consider the adolescent market. NSU training, tailored to this new demographic, could become a catalyst for rapid adoption among adolescent psychiatrists and nurse practitioners. Imagine the ripple effect in this untapped market, where 8,000 adolescent psychiatrists and 6,000 nurse practitioners are now able to offer NeuroStar to their patients.

A Conservative Estimate of the Ripple Effect

While the 20% repeat attendance rate may appear modest at first glance, its power lies in its potential to trigger a cascade of adoption and utilization. This hidden gem in Neuronetics' earnings, overlooked by many, could be the spark that ignites a 300% growth explosion in the coming years. It's a detail worth watching closely, as it could signify a paradigm shift in how Neuronetics engages its customer base and unlocks the full potential of its transformative therapy.

Hypothetical Scenario:

Current NSU Repeat Attendee Sites 220 sites (20% of 1,100 sites) New Sites Convinced by Repeat Attendees 55 new sites (25% of repeat attendees convincing 1 new site) Additional NeuroStar Systems Adopted 27.5 new systems (50% of new sites adopting 1 system) Total New Revenue from Systems $3.85 million (27.5 systems x $140,000)

This is a conservative estimate, and the actual impact could be far greater. The ripple effect, fueled by the power of NSU repeat attendees, could lead to a substantial increase in Neuronetics' customer base, system sales, and treatment session revenue.

Visualizing the Growth Potential:

The following chart illustrates the potential growth in Neuronetics' customer base driven by the ripple effect, assuming the conservative estimates outlined above.

"Fun Fact: Did you know that Neuronetics was founded in 2001, inspired by the work of Dr. Mark George, a pioneer in TMS research? His groundbreaking research demonstrated the potential of TMS to treat depression, paving the way for NeuroStar's development and FDA clearance."