Analysts Think This Small-Cap Stock Could Soar in 2024

Brainsway Ltd. (BWAY) might be one of the best-performing small-cap stocks you've never heard of. This tiny stock under $10 vaulted to a gain of more than 162% over the course of 2023, but could continue to see significant upside in 2024, according to analyst forecasts. 

Should investors scoop up BWAY stock now for another year of outsized returns? Here's a closer look.

About Brainsway

Medical device company Brainsway manufactures and markets Deep Transcranial Magnetic Stimulation (Deep TMS) systems for treating a variety of mental health disorders. The Deep TMS tech uses controlled magnetic pulses to treat depression and OCD, and even help patients kick the smoking habit, backed by FDA approval.

Brainsway made significant strides in 2023 to expand its market presence both in South Korea and the U.S. 

In South Korea, Brainsway announced the expanded availability of its Deep TMS technology. This development is expected to meet the growing demand for advanced noninvasive neurostimulation treatments in the country, and the extended availability of this device is projected to increase its installed base in the country to more than 20 Deep TMS systems, marking a significant milestone in the company's global expansion.

In the U.S., Brainsway has expanded access to its Deep TMS technology with a growing network in the Western U.S. The company's expanded collaboration with a mental health treatment provider in the Western U.S. signifies a strategic move to increase the footprint of its Deep TMS systems, and the scaling up from a series of orders to seven systems, with intentions for further growth, indicates a robust demand for non-pharmacological treatments in mental health.

BWAY's 2023 Performance in Review

Now, let's talk stocks. BWAY was a major standout in 2023, rocketing to a gain of 162% over the course of the year. However, you can still pick up shares of this growth stock at well under $10 each.

What's behind the outperformance? Increasing sales, a growing market presence, positive clinical results, and positive attention from analysts all helped to push BWAY higher last year.

The stock carries a market cap of $105 million, establishing it as a small-cap player. Yes, these names can be riskier - think higher volatility, lower liquidity, and lighter analyst coverage - but the potential rewards are sweet.

And Brainsway is flexing some financial muscle, reporting higher revenues and shrinking losses in recent quarters. In Q3 2023, the loss per share arrived at $0.01, beating the analyst estimate of -$0.07 by a mile. Revenue of $8.30 million also topped expectations.

For fiscal year 2024, analysts expect those losses to keep narrowing, while revenue is expected to grow 14.5% to nearly $36 million. BWAY is priced at only about 3x forward sales, which is reasonable given the stock's growth prospects.

What Do Analysts Expect for BWAY?

There are only four anaysts covering BWAY right now, but they're upbeat, with a unanimous “Strong Buy” rating from this crew. Digging into recent notes, Northland Securities raised its price target for Brainsway from $5.50 to $9, with the analyst citing solid execution and indications of strong demand.

The average price target for BWAY is $9.60, implying expected upside of 48%. Meanwhile, the Street-high target of $12 from H.C. Wainwright implies an 85% surge from here.

In a nutshell, Brainsway emerges as a compelling small-cap stock to watch in 2024. With increased adoption of its Deep TMS tech, an attractive valuation, and compelling growth forecasts, it looks like 2024 could be another breakout year for this medical device maker. While small-cap investing comes with risks, the company's strategic moves, recent expansion into South Korea, and positive financial outlook make it worthy of consideration.