Inspire Medical Systems (INSP) AI Stock Analysis

• Market Cap: $2.71B
• Dividend Yield: N/A
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): 53.2
• Beta (1Y): 0.52
• Revenue Growth: 22.05%
• EPS Growth: 785.52%
• Country: US
• Employees: 1,246
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Devices
• EPS (TTM): 0.45
• Shares Outstanding: 29,574,316
• 10 Day Avg. Volume: 997,566
• 30 Day Avg. Volume: 1,295,174
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 4.13
• Enterprise Value/Gross Profit: 4.89
• Enterprise Value/Ebitda: 43.85
• 1Y Price Target: $158.29
• Price Target Upside: 71.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 58 Neutral
• Price Target: $97.00 ▲(5.09% Upside)

The overall stock score is primarily influenced by strong financial performance and positive corporate events. However, technical analysis indicates bearish trends, and valuation concerns due to a high P/E ratio weigh down the score. Mixed earnings call sentiment also impacts the overall assessment.

Positive Factors

Procedure Efficiency

Inspire 5 procedure efficiency is expected to support volume and sales growth acceleration.

Sales Growth

INSP reported 2Q25 sales slightly ahead of consensus, with adjusted EBITDA margin significantly above expectations.

Valuation Levels

INSP looks increasingly attractive at current levels, trading near trough valuation levels after significant underperformance.

Negative Factors

Execution and Demand Issues

Investors will struggle to separate ongoing logistics and execution issues from underlying demand issues, and while management guided to an acceleration in 2026 sales, investors do not expect to give them credit for that just yet.

Growth Outlook

The downgrade to HOLD is due to a lower growth outlook and reduced revenue and EPS forecasts.

Guidance and Market Concerns

Inspire provided a disappointing update on its 2Q25 call as a significant cut to 2025E guidance took center stage amid worsening concerns around the health of the company’s underlying markets.

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 is primarily engaged in the design and commercialization of its flagship product, the Inspire therapy system, which is a surgically implanted device that stimulates the hypoglossal nerve to maintain an open airway during sleep. Inspire operates within the healthcare sector, targeting both patients and healthcare providers, aiming to enhance treatment options for sleep apnea beyond traditional CPAP devices.

How the Company Makes Money

Inspire Medical Systems generates revenue primarily through the sale of its Inspire therapy system, which includes the implantation device and related components. The company also earns income from the ongoing sale of accessories and follow-up care associated with the therapy. Revenue is driven by hospital and surgical center partnerships where the Inspire system is implemented, and the company often collaborates with healthcare professionals to promote and educate about the benefits of its therapy. Additionally, reimbursement from insurance providers plays a crucial role in the company's earnings, as it allows patients to afford the therapy, thereby expanding the potential customer base.

Inspire Medical Systems Financial Statement Overview

Summary

Inspire Medical Systems demonstrates strong revenue growth and efficient cost management, reflected in its high gross profit margins. The company maintains a robust balance sheet with low leverage, enhancing its financial stability. While cash flow metrics show positive trends, there is room for improvement in converting net income into free cash flow.

Income Statement

Inspire Medical Systems has shown consistent revenue growth with a TTM revenue growth rate of 2.52%. The company maintains a strong gross profit margin of 84.47% in TTM, indicating efficient cost management. However, the net profit margin is relatively low at 6.17%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have improved over the years, reflecting better operational efficiency.

Balance Sheet

The company has a solid balance sheet with a low debt-to-equity ratio of 0.048, indicating low leverage and financial stability. The return on equity is positive at 7.87% in TTM, showing effective use of equity to generate profits. The equity ratio is strong, reflecting a healthy capital structure with a significant portion of assets financed by equity.

Cash Flow

Inspire Medical Systems exhibits a positive trend in free cash flow growth, with a 7.81% increase in TTM. The operating cash flow to net income ratio is 1.26, indicating good cash generation relative to net income. However, the free cash flow to net income ratio of 0.72 suggests that not all net income is translating into free cash flow, which could be a point of concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	861.31M	802.80M	624.80M	407.86M	233.39M	115.38M
Gross Profit	727.54M	679.82M	528.22M	341.74M	200.12M	97.76M
EBITDA	81.21M	65.03M	-17.06M	-39.69M	-38.62M	-53.16M
Net Income	53.12M	53.51M	-21.15M	-44.88M	-42.04M	-57.20M
Balance Sheet
Total Assets	802.19M	808.38M	676.81M	564.88M	295.08M	281.19M
Cash, Cash Equivalents and Short-Term Investments	300.89M	445.55M	460.38M	451.41M	214.47M	234.36M
Total Debt	33.06M	31.79M	24.85M	8.87M	34.09M	30.63M
Total Liabilities	124.38M	118.69M	104.30M	68.87M	66.04M	51.44M
Stockholders Equity	677.81M	689.70M	572.51M	496.01M	229.05M	229.75M
Cash Flow
Free Cash Flow	85.01M	91.12M	1.02M	2.47M	-24.79M	-55.50M
Operating Cash Flow	117.44M	130.25M	24.65M	11.57M	-20.12M	-53.05M
Investing Cash Flow	-54.20M	-113.12M	-294.82M	-19.60M	29.14M	86.63M
Financing Cash Flow	-144.31M	-52.39M	13.95M	235.08M	14.95M	134.06M

Inspire Medical Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 92.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INSP, the sentiment is Negative. The current price of 92.3 is below the 20-day moving average (MA) of 93.12, below the 50-day MA of 115.34, and below the 200-day MA of 157.07, indicating a bearish trend. The MACD of -7.30 indicates Negative momentum. The RSI at 40.39 is Neutral, neither overbought nor oversold. The STOCH value of 70.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INSP.

Inspire Medical Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMDX	71 Outperform	$3.93B	59.56	28.21%	―	48.09%	2410.18%
IRTC	66 Neutral	$5.40B	―	-91.13%	―	22.37%	31.14%
ITGR	65 Neutral	$3.80B	47.90	5.15%	―	7.21%	-23.29%
LIVN	61 Neutral	$3.09B	30.62	-17.87%	―	8.57%	-1154.64%
INSP	58 Neutral	$2.71B	53.15	8.07%	―	22.05%	785.52%
PRCT	53 Neutral	$2.25B	―	-26.40%	―	55.71%	24.37%
Sector *	51 Neutral	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%

Inspire Medical Systems Corporate Events

Inspire Medical Systems CFO to Step Down

Inspire Medical Systems announced that its Chief Financial Officer, Richard J. Buchholz, will step down from his position effective December 31, 2025, to pursue other professional opportunities. Buchholz will remain in a financial advisory role until February 28, 2026, to ensure a smooth transition. The company has initiated a search for a new CFO and reaffirmed its 2025 financial guidance with expected revenues between $900 to $910 million. Buchholz has been instrumental in the company’s growth, contributing to its revenue increase from $4 million to over $800 million in 2024 and guiding it through its IPO and the challenges of the COVID-19 pandemic.

Inspire Medical Systems Announces $200M Share Buyback

On August 11, 2025, Inspire Medical Systems announced that its Board of Directors authorized a share repurchase program of up to $200 million. This decision reflects the company’s confidence in its growth prospects and the belief that its stock is undervalued. The repurchase program is part of a broader strategy to support the launch of Inspire V, their next-generation neurostimulation system, and to return capital to shareholders while continuing to invest in future growth.

Inspire Medical Systems Reports Q2 2025 Financial Results

Inspire Medical Systems announced its financial results for the second quarter of 2025, reporting a revenue of $217.1 million, an 11% increase from the previous year. Despite achieving a gross margin of 84%, the company faced an operating loss of $3.3 million, partly due to a $4.0 million non-cash impairment of a strategic investment. The company also launched its Inspire V neurostimulation system in the U.S., which has received positive feedback but is experiencing slower-than-expected commercial progress, impacting financial results for the year. Executive Vice President Randall A. Ban announced his retirement effective January 30, 2026, marking the end of his influential tenure at the company.

Inspire Medical Systems Launches Inspire V for OSA

Inspire Medical Systems announced the full launch of Inspire V in May 2025, highlighting its advanced accelerometer-based sensing technology for treating obstructive sleep apnea (OSA). This innovation simplifies the implant procedure and enhances therapy effectiveness by accurately timing stimulation during the most vulnerable phases of the breathing cycle, potentially improving patient outcomes and reducing the need for revisions.