Inspire Medical Systems (INSP): Assessing Valuation After Guidance Cut and Legal Probe on Inspire V Transition

If you own a piece of Inspire Medical Systems (INSP), the past few weeks have likely tested your confidence. Fresh off a better-than-expected first quarter, Inspire spooked the market with weaker guidance for the months ahead, blaming a sales slowdown as hospitals work through older inventory and transition to the new Inspire V system. The news landed at the same time as a legal inquiry into the company’s communications around these challenges, putting a harsh spotlight on management and future growth expectations.

Shares of Inspire have tumbled in response, losing 18% after the guidance update and marking a slide of 62% over the year. Notably, this decline comes even as annual revenue and net income growth rates remain positive. The market’s reaction suggests that investors are recalibrating their view of risk as Inspire navigates temporary headwinds and deals with the legal investigation. There is real uncertainty about when or if growth momentum will return.

Given this drop and the company’s growth story now facing scrutiny, the key question is whether Inspire’s current price is a bargain or if the risks and future growth are already reflected in the valuation.

Most Popular Narrative: 44.6% Undervalued

According to the most widely followed valuation narrative, Inspire Medical Systems' shares are trading well below their estimated fair value. This reflects significant upside potential if company projections play out.

The recent delay in transitioning centers to the Inspire V next-generation system, including slower onboarding, delayed SleepSync implementation, and the Medicare billing update, are transitory issues. As these barriers resolve (with Medicare billing now live and most centers expected to complete onboarding by end of Q3), procedure volumes and revenue growth are positioned to reaccelerate in 2026 as pent-up demand is realized.

Curious what’s fueling this strong undervaluation narrative? The answer lies in ambitious future growth assumptions, improving profit margins, and a bold forecast for long-term market expansion. Want the details behind the numbers that set this fair value well above today’s stock price? Dive in to uncover what could drive the next big move.

Result: Fair Value of $144.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution delays or rising competition could prolong Inspire's recovery and put pressure on growth assumptions that underpin bullish valuations.

Find out about the key risks to this Inspire Medical Systems narrative.

Another View: Market-Based Valuation Raises Caution

Looking from a different angle, Inspire Medical Systems is judged expensive when stacked against the broader industry on earnings. This challenges the optimistic outlook and leaves investors to wonder if the price reflects future risks.

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Inspire Medical Systems to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Inspire Medical Systems Narrative

If you see the numbers differently or want to dig into the data firsthand, you can shape your own narrative in just a few minutes. Do it your way.

A great starting point for your Inspire Medical Systems research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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