INSP: Outperform Ratings And Strong Earnings Will Drive Share Price Recovery

Inspire Medical Systems' average analyst price target was revised down by approximately $10.60 per share. Analysts cited slower expected revenue growth and ongoing operational headwinds as factors impacting near-term performance.

Analyst Commentary

Recent research updates reveal a mixed outlook among analysts covering Inspire Medical Systems. Adjustments to price targets and ratings reflect ongoing shifts in both business performance expectations and sector sentiment.

• Bullish analysts note that Inspire Medical delivered a marginal revenue beat and a notable earnings per share outperformance in the latest quarter. This may provide a foundation for future positive surprises.
• Some believe that guidance for 10-11% growth in 2026 is a conservative baseline. This could leave room for the company to outperform its targets and potentially raise guidance later on.
• Despite headwinds, the company maintains an Outperform rating from prominent market participants. This indicates ongoing confidence in management's long-term strategy and execution.
• The broader MedTech sector is viewed as offering attractive valuations and opportunities. Inspire Medical is positioned to benefit as dislocations in the market correct over time.

• Bearish analysts are concerned by downgraded ratings and substantial reductions in price targets. These reflect skepticism about near-term growth and profitability.
• Headwinds highlighted during recent earnings calls, including operational challenges and uncertainty around new product adoption, are expected to persist and may require elevated expenses to address.
• Sentiment has turned more cautious due to a lowered 2025 revenue outlook, with only 10% year-over-year growth anticipated in upcoming quarters.
• Lack of strong investor positioning and new capital entering the MedTech segment could result in continued stock volatility for Inspire Medical, particularly in response to any earnings surprises or guidance adjustments.

What's in the News

• Grant & Eisenhofer P.A. filed a class action lawsuit on behalf of the City of Pontiac Reestablished General Employees’ Retirement System against Inspire Medical and several executives, alleging they misrepresented the launch and demand for the Inspire V sleep apnea device. The company’s stock fell over 32% and erased $1.2 billion in market capitalization after the news broke on August 4, 2025. (Key Developments)
• The company repurchased 552,423 shares between August 11 and September 30, 2025, amounting to $90.49 million and representing 1.87% of shares outstanding. (Key Developments)
• Inspire Medical raised its 2025 full-year diluted net income per share guidance to a range of $0.90 to $1.00, higher than prior estimates. The company expects revenue between $900 million and $910 million, representing 12% to 13% growth over 2024. (Key Developments)
• Recently published clinical trial data from the Inspire V system’s Singapore study and U.S. limited market release show shorter surgical times, strong safety, and successful outcomes compared to previous device generations. (Key Developments)
• Chief Financial Officer Rick Buchholz will step down at the end of 2025. He will remain in an advisory role through February 2026 while the company searches for a replacement. (Key Developments)

Valuation Changes

• Fair Value Estimate: Decreased from $117.40 to $106.79 per share, reflecting a drop in perceived intrinsic value.
• Discount Rate: Increased slightly from 7.48% to 7.73%, indicating a modest rise in risk or required return.
• Revenue Growth: Reduced from 13.01% to 11.43%, suggesting more moderate near-term sales expectations.
• Net Profit Margin: Rose from 6.96% to 7.65%, pointing to higher projected profitability relative to revenue.
• Future P/E Ratio: Fell significantly from 47.15x to 37.17x, suggesting the stock is now valued at a lower multiple of expected earnings.