Inspire Medical Systems (INSP) AI Stock Analysis

• Market Cap: $2.20B
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 52.0
• Beta (1Y): 0.38
• 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: 1,356,814
• 30 Day Avg. Volume: 1,131,917
• 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: 0.98
• Enterprise Value/Revenue: 2.45
• Enterprise Value/Gross Profit: 2.88
• Enterprise Value/Ebitda: 28.20
• 1Y Price Target: $137.62
• Price Target Upside: 81.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $86.00 ▲(13.49% Upside)

INSP’s score is driven primarily by strong financial fundamentals (high margins, improving profitability, low leverage) and a solid fundamental outlook from guidance and recent business updates. These positives are meaningfully offset by weak technicals (below key moving averages with negative MACD) and a high P/E valuation with no dividend support.

Positive Factors

High gross margins and improving profitability

Sustained mid-80s gross margins reflect strong product-level economics and pricing power for an implanted device business. That structural margin advantage supports scalable profit growth as unit volumes rise, enabling reinvestment in R&D and commercialization while insulating gross profitability from moderate cost swings.

Low leverage and strong balance sheet

Minimal financial leverage provides durable financial flexibility to fund clinical trials, expand the sales footprint, or weather reimbursement cycles without reliance on debt. A strong equity base supports strategic investments and potential M&A, reducing refinancing and solvency risk over the medium term.

Product adoption and constructive 2026 guidance

Widespread clinician readiness to adopt Inspire V and guidance for double-digit revenue growth indicate durable demand and clinical acceptance. Continued product transitions and early reimbursement improvements create a structural tailwind for unit volumes, bolstering long-term revenue scalability and market-share gains in sleep apnea therapy.

Negative Factors

Rising operating expense base

Material increases in patient marketing and corporate spending can persist as the company commercializes Inspire V, constraining operating-margin expansion. If sales productivity does not keep pace with elevated SG&A, sustained higher expense intensity could reduce incremental profitability over the next several quarters.

Suboptimal free cash flow conversion

While FCF is growing, conversion lag versus accounting earnings indicates working capital, capex, or timing effects consume cash. Persistent below‑par conversion reduces internal funding for commercialization or buybacks and increases sensitivity to cash-cycle disruptions, weakening cash-driven optionality over time.

Decline in net income despite revenue growth

Net income fell year-over-year despite higher revenue, driven by elevated operating expenses and legal fees. This shows profitability remains exposed to cost inflation and litigation risk; if such expense pressures persist, they could limit sustained margin improvement even as top-line growth continues.

Inspire Medical Systems Business Overview & Revenue Model

Company Description

Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally. The company offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. It also develops a novel, a closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.

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

Strong overall financial health supported by very high gross margins (mid-80% range), improved profitability (TTM net margin 6.17%), and a low-leverage balance sheet (debt-to-equity 0.048). Cash generation is improving (TTM free cash flow growth 16.25%), though free cash flow conversion vs. net income is less than ideal (FCF/NI 0.72) and operating efficiency still has room to improve.

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	76.64M	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: Negative
• Last Price: 75.78
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 75.78 is below the 20-day moving average (MA) of 89.91, below the 50-day MA of 104.19, and below the 200-day MA of 109.48, indicating a bearish trend. The MACD of -6.50 indicates Positive momentum. The RSI at 30.87 is Neutral, neither overbought nor oversold. The STOCH value of 11.05 is Positive, 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	76 Outperform	$4.58B	54.12	32.48%	―	41.20%	173.53%
INSP	69 Neutral	$2.20B	51.98	6.54%	―	16.81%	34.90%
ITGR	65 Neutral	$3.04B	36.37	5.18%	―	7.81%	-26.32%
LIVN	63 Neutral	$3.59B	-16.38	-17.63%	―	8.97%	-1024.86%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
IRTC	51 Neutral	$4.98B	-95.33	-53.15%	―	25.45%	66.62%
PRCT	41 Neutral	$1.62B	-18.83	-27.22%	―	50.07%	21.22%

Inspire Medical Systems Corporate Events

Inspire Medical Systems Issues Strong Preliminary 2025 Revenue Results

On January 12, 2026, Inspire Medical Systems reported preliminary, unaudited revenue for the fourth quarter and full year 2025, indicating continued double‑digit growth and strong adoption of its fifth‑generation Inspire V system. Fourth-quarter 2025 revenue is expected to come in at approximately $268.9 million to $269.1 million, up about 12% from a year earlier, while full‑year 2025 revenue is anticipated in the range of $911.8 million to $912.0 million, representing roughly 14% growth over 2024. The company also issued initial 2026 guidance, projecting revenue between $1.003 billion and $1.013 billion, or 10% to 11% growth, and noted that this outlook does not yet factor in any potential upside from recent reimbursement developments, which remain subject to coding clarification. In a parallel leadership move, the board on January 9, 2026 approved the appointment of veteran finance executive Matt Osberg as Executive Vice President and Chief Financial Officer, effective after filing the 2025 Form 10‑K, with a compensation package that includes salary, bonus eligibility, equity incentives and change‑of‑control protections, while current CFO Richard Buchholz will serve as interim CFO through the completion of the 2025 annual report, underscoring a managed transition in the company’s financial leadership as it enters its next phase of growth.

The most recent analyst rating on (INSP) stock is a Buy with a $120.00 price target. To see the full list of analyst forecasts on Inspire Medical Systems stock, see the INSP Stock Forecast page.

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.

The most recent analyst rating on (INSP) stock is a Buy with a $94.00 price target. To see the full list of analyst forecasts on Inspire Medical Systems stock, see the INSP Stock Forecast page.

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.

The most recent analyst rating on (INSP) stock is a Hold with a $77.00 price target. To see the full list of analyst forecasts on Inspire Medical Systems stock, see the INSP Stock Forecast page.