Why Inspire Medical Systems (INSP) Is Down 5.7% After Earnings Climb But Profit Falls Sharply

• Inspire Medical Systems reported its third quarter 2025 results, with sales rising to US$224.5 million from US$203.19 million a year earlier, but net income decreasing to US$9.93 million compared to US$18.5 million in the prior year.
• This performance highlights a continuing trend of revenue growth paired with a significant contraction in earnings, reflecting the ongoing operational and industry challenges facing the company in 2025.
• We will explore how the sales increase alongside the marked drop in net income informs Inspire Medical Systems' investment narrative going forward.

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Inspire Medical Systems Investment Narrative Recap

To be a shareholder in Inspire Medical Systems right now, you need conviction in the company’s ability to overcome operational setbacks and successfully drive adoption of its next-generation Inspire V device, especially as higher expenses have compressed earnings despite strong revenue growth. The latest results don’t meaningfully alter the short-term catalyst, reaccelerating procedure volumes as Inspire V onboarding finishes, but reinforce that margin recovery remains the principal near-term risk amidst persistent cost pressures and delayed ramp-up at surgery centers.

Of the recent corporate actions, the October release of new clinical outcomes data for Inspire V stands out, given its demonstration of shorter procedure times and improved adherence. This update directly ties into the company’s biggest catalyst: smoother Inspire V adoption could help reignite growth momentum once onboarding and training challenges are resolved, potentially supporting both revenue and earnings improvement as more centers come online.

By contrast, the company’s continued need for elevated marketing and expansion spending in the face of margin compression is something investors should be aware of...

Read the full narrative on Inspire Medical Systems (it's free!)

Inspire Medical Systems is projected to reach $1.3 billion in revenue and $103.6 million in earnings by 2028. This outlook is based on an assumed annual revenue growth rate of 14.5% and a $50.5 million increase in earnings from the current $53.1 million.

Uncover how Inspire Medical Systems' forecasts yield a $117.40 fair value, a 59% upside to its current price.

Exploring Other Perspectives

Eight private investors in the Simply Wall St Community estimated Inspire’s fair value from as low as US$93.33 to as high as US$270.86 per share. With cost pressures pinching margins despite revenue growth, you’ll want to see how others factor these hurdles into their own outlooks.

Explore 8 other fair value estimates on Inspire Medical Systems - why the stock might be worth just $93.33!

Build Your Own Inspire Medical Systems Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Inspire Medical Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Inspire Medical Systems' overall financial health at a glance.

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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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