NeuroPace Soars 38.5% on Q3 Earnings Surge and Regulatory Catalysts – What’s Next for the Medical Device Innovator?

Summary
• NeuroPace (NPCE) surges 38.5% intraday, trading at $13.02 after opening at $11.63
• Q3 revenue jumps 30% to $27.4M, surpassing estimates by 11.38%
• Guidance raised to $97M–$98M for 2025, with 76%–77% gross margin
• Stock trades within $10.77–$13.81 range, outperforming a sector leader’s -0.63% decline

NeuroPace’s shares erupted on Wednesday, fueled by a blockbuster Q3 earnings report and revised full-year guidance. The medical device innovator’s 30% revenue growth, margin expansion, and first-time positive adjusted EBITDA sparked a sharp rally. With the stock trading near its 52-week high of $18.98, investors are weighing whether this surge is a sustainable inflection point or a short-term pop.

Q3 Earnings Beat and Guidance Hike Fuel NeuroPace’s 38.5% Surge
NeuroPace’s explosive move stems from a combination of outperforming Q3 results and upgraded guidance. Revenue surged 30% year-over-year to $27.4 million, driven by 31% growth in its RNS System sales. Gross margin expanded to 77.4%, and the company posted positive adjusted EBITDA for the first time in history. Management raised full-year revenue guidance to $97 million–$98 million (21%–23% growth) and gross margin to 76%–77%, signaling confidence in operational leverage. These metrics, coupled with a 45% earnings surprise, triggered a sharp re-rating of the stock.

Medical Devices Sector Volatile as NeuroPace Outperforms Medtronic
The broader medical devices sector remains mixed, with Medtronic (MDT) down 0.63% despite NeuroPace’s outperformance. While NeuroPace’s rally reflects strong execution and margin progress, peers like Globus Medical (GMED) face earnings uncertainty ahead of their November 6 report. The sector’s 38th percentile Zacks rank suggests selective opportunities, but NeuroPace’s 30% revenue growth and 77.4% gross margin outpace industry averages, highlighting its unique value proposition in epilepsy treatment.

Options and ETF Plays for NeuroPace’s Volatile Rally – Leverage and Gamma Focus
• RSI: 22.57 (oversold)
• MACD: -0.146 (bearish), Signal Line: 0.031 (bullish divergence)
• 200D MA: $11.30 (current price above)
• Bollinger Bands: $9.48–$11.41 (price at upper band)

NeuroPace’s technicals suggest a short-term overbought condition but strong momentum. Key support at $10.44 (middle Bollinger) and resistance at $13.81 (intraday high). The stock’s 38.5% surge has created a high-gamma, high-IV environment, favoring options with directional bias. Two top options:

• NPCE20251121C12.5
- Strike: $12.50, Expiration: 2025-11-21
- IV: 101.64% (high volatility)
- Delta: 0.618 (moderate directional sensitivity)
- Theta: -0.048 (rapid time decay)
- Gamma: 0.1336 (high sensitivity to price moves)
- Turnover: 345 (liquid)
- Leverage: 9.29%
- Payoff (5% up): $0.76 (max(0, 13.67 - 12.50))
- Why: High gamma and IV make this call ideal for a continuation of the rally, with rapid premium erosion if the move stalls.

• NPCE20251219C12.5
- Strike: $12.50, Expiration: 2025-12-19
- IV: 62.99% (moderate)
- Delta: 0.623 (strong directional bias)
- Theta: -0.018 (slower decay)
- Gamma: 0.1319 (high sensitivity)
- Turnover: 815 (liquid)
- Leverage: 9.10%
- Payoff (5% up): $0.81 (max(0, 13.67 - 12.50))
- Why: Longer-dated option with similar gamma and lower theta, offering more time for the stock to consolidate gains.

Action: Aggressive bulls may consider NPCE20251121C12.5 for a short-term pop, while NPCE20251219C12.5 suits a mid-term hold. Watch for a breakdown below $10.44 to trigger a reevaluation.

Backtest NeuroPace Stock Performance
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Bullish Momentum Intact – Key Levels to Watch for NeuroPace’s Next Move
NeuroPace’s 38.5% surge reflects strong execution and margin progress, but sustainability hinges on maintaining its 30% revenue growth and navigating the implied Q4 deceleration risk. The stock’s 77.4% gross margin and positive EBITDA are tailwinds, but inventory growth and the Dixie product line wind-down pose near-term headwinds. Investors should monitor the $10.44 support level and the $13.81 intraday high. With Medtronic (MDT) down 0.63%, sector rotation could amplify NeuroPace’s outperformance. Act now: Buy NPCE20251219C12.5 for a mid-term play, or short-term calls if $10.44 holds.