Inspire Medical Systems (INSP) AI Stock Analysis

• Market Cap: $4.08B
• Dividend Yield: N/A
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 96.1
• Beta (1Y): 0.46
• Revenue Growth: 16.81%
• EPS Growth: 34.90%
• Country: US
• Employees: 1,246
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 0.38
• Shares Outstanding: 29,056,435
• 10 Day Avg. Volume: 1,435,570
• 30 Day Avg. Volume: 1,622,039
• PEG Ratio: -0.29
• Price to Book (P/B): 8.00
• Price to Sales (P/S): 6.87
• P/FCF Ratio: 60.55
• Enterprise Value/Market Cap: 0.47
• Enterprise Value/Revenue: 2.16
• Enterprise Value/Gross Profit: 2.54
• Enterprise Value/Ebitda: 24.88
• 1Y Price Target: $129.80
• Price Target Upside: -7.33% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 0.99
• Revenue Forecast (FY): $905.23M

• Rating: 72 Outperform
• Price Target: $160.00 ▲(14.23% Upside)

Inspire Medical Systems has a strong financial foundation and positive corporate developments, which are significant strengths. However, the high P/E ratio suggests potential overvaluation, and technical indicators warn of a possible short-term pullback. Overall, the stock is positioned well for long-term growth, but investors should be cautious of valuation and market volatility.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, enhancing long-term financial stability.

Improved Gross Margin

Improved gross margins reflect efficient cost management and product mix, contributing to sustainable profitability.

Tax Valuation Allowance Release

This release will provide a substantial tax benefit, enhancing net income and potentially boosting shareholder value.

Negative Factors

Increased Operating Expenses

Rising operating expenses can pressure margins and reduce profitability, necessitating cost control measures.

Decreased Net Income

A decline in net income despite revenue growth suggests challenges in managing costs and maintaining profitability.

Legal Fees Impact

Legal challenges can lead to increased costs and potential reputational risks, affecting long-term operational efficiency.

Inspire Medical Systems Business Overview & Revenue Model

Company Description

Inspire Medical Systems, Inc. is a medical technology company focused on developing innovative solutions for patients suffering from obstructive sleep apnea (OSA). The company's primary product is the Inspire therapy system, an implanted device that delivers neurostimulation to key airway muscles to maintain an open airway during sleep. Inspire Medical Systems operates in the healthcare sector, specifically within sleep medicine, and is dedicated to improving the quality of life for patients with OSA through its advanced medical devices.

How the Company Makes Money

Inspire Medical Systems generates revenue primarily through the sale of its Inspire therapy system, which includes the device itself, surgical implantation, and follow-up patient management services. The company operates on a direct sales model, selling its products to hospitals and sleep clinics, and it may also collaborate with healthcare providers for training and support services. Additionally, Inspire benefits from reimbursement programs by insurance companies that cover the cost of the Inspire system for eligible patients, which further drives its revenue. The growth in awareness of sleep apnea and the increasing acceptance of innovative treatments also contribute significantly to the company's earnings.

Inspire Medical Systems Financial Statement Overview

Summary

Inspire Medical Systems exhibits strong financial health with consistent revenue growth, robust profit margins, and a solid balance sheet with low leverage. The company has improved its profitability and cash flow generation, although there is room for enhancing operational efficiency and cash flow conversion.

Income Statement

Inspire Medical Systems has shown consistent revenue growth, with a TTM revenue growth rate of 2.47%. The company has maintained strong gross profit margins above 84% over the years, indicating efficient cost management. The net profit margin has improved significantly from negative values in previous years to 6.17% in the TTM period, reflecting enhanced profitability. However, the EBIT and EBITDA margins, though positive, suggest room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet is strong, with a low debt-to-equity ratio of 0.048, indicating minimal leverage and financial risk. Return on equity has improved to 7.87% in the TTM period, showcasing better utilization of shareholder funds. The equity ratio remains robust, reflecting a solid capital structure. Overall, the balance sheet indicates financial stability and prudent management of resources.

Cash Flow

Inspire Medical Systems has demonstrated positive free cash flow growth of 16.25% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 1.26 suggests healthy cash flow relative to earnings. However, the free cash flow to net income ratio of 0.72 indicates that not all earnings are translating into free cash flow, suggesting potential areas for cash flow optimization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	882.62M	802.80M	624.80M	407.86M	233.39M	115.38M
Gross Profit	749.48M	679.82M	528.22M	341.74M	200.12M	97.76M
EBITDA	76.63M	65.03M	-17.06M	-40.73M	-38.62M	-54.13M
Net Income	44.56M	53.51M	-21.15M	-44.88M	-42.04M	-57.20M
Balance Sheet
Total Assets	807.72M	808.38M	676.81M	564.88M	295.08M	281.19M
Cash, Cash Equivalents and Short-Term Investments	322.59M	445.55M	460.38M	451.41M	214.47M	234.36M
Total Debt	32.58M	31.79M	24.85M	8.87M	34.09M	30.63M
Total Liabilities	141.26M	118.69M	104.30M	68.87M	66.04M	51.44M
Stockholders Equity	666.46M	689.70M	572.51M	496.01M	229.05M	229.75M
Cash Flow
Free Cash Flow	98.82M	91.12M	1.02M	2.47M	-24.79M	-55.50M
Operating Cash Flow	133.69M	130.25M	24.65M	11.57M	-20.12M	-53.05M
Investing Cash Flow	37.13M	-113.12M	-294.82M	-19.60M	29.14M	86.63M
Financing Cash Flow	-205.28M	-52.39M	13.95M	235.08M	14.95M	134.06M

Inspire Medical Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 140.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INSP, the sentiment is Positive. The current price of 140.07 is above the 20-day moving average (MA) of 114.25, above the 50-day MA of 92.96, and above the 200-day MA of 121.07, indicating a bullish trend. The MACD of 15.33 indicates Negative momentum. The RSI at 74.91 is Negative, neither overbought nor oversold. The STOCH value of 80.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INSP.

Inspire Medical Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMDX	77 Outperform	$4.67B	54.45	32.48%	―	41.20%	173.53%
INSP	72 Outperform	$4.08B	96.07	6.54%	―	16.81%	34.90%
ITGR	65 Neutral	$2.51B	30.12	5.18%	―	7.81%	-26.32%
LIVN	63 Neutral	$3.39B	―	-17.63%	―	8.97%	-1024.86%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
IRTC	51 Neutral	$5.58B	―	-53.15%	―	25.45%	66.62%
PRCT	41 Neutral	$1.96B	―	-27.22%	―	50.07%	21.22%

Inspire Medical Systems Corporate Events

Inspire Medical Systems to Release Tax Valuation Allowance

On November 6, 2025, Inspire Medical Systems announced its plan to release a significant portion of its valuation allowance on U.S. deferred tax assets in the fourth quarter of fiscal 2025. This move is expected to result in an income tax benefit of $90 million to $100 million, potentially increasing diluted earnings per share by $3.00 to $3.30, impacting the company’s financial performance positively.

Inspire Medical Systems Reports Q3 2025 Financial Results

Inspire Medical Systems reported its financial results for the third quarter of 2025, showing a 10% increase in revenue to $224.5 million compared to the previous year. The company achieved a gross margin of 85.8% and a net income of $9.9 million. The Inspire V system, which offers enhanced performance and reduced surgical procedure time, has received positive feedback from clinicians, with over 75% of centers ready to transition to this new system. Inspire reaffirmed its full-year revenue guidance of $900 to $910 million and increased its diluted net income per share guidance to $0.90 to $1.00. The company completed a $50 million share repurchase and presented clinical evidence of the Inspire V system’s efficacy at industry meetings.

Inspire Medical Systems Unveils Positive Data for Inspire V

In October 2025, Inspire Medical Systems published clinical outcomes data for their Inspire V system at the ISSS/AAO-HNS meetings in Indianapolis. The data, from a Singapore study and a limited U.S. market release, showed significant improvements in patient adherence, safety, and surgical efficiency compared to previous models. The Inspire V system demonstrated a 20% reduction in surgical times and superior respiratory sensing, leading to enhanced patient comfort and therapy outcomes. The results indicate a promising advancement in treating obstructive sleep apnea, with implications for increased adoption and potential changes in reimbursement levels.