Inspire Medical Systems (INSP) AI Stock Analysis

• Market Cap: $5.32B
• Dividend Yield: N/A
• Average Volume (3M): 536.35K
• Price to Earnings (P/E): 103.5
• Beta (1Y): 0.73
• Revenue Growth: 28.49%
• EPS Growth: N/A
• Country: US
• Employees: 1,246
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical Equipment & Supplies
• EPS (TTM): 1.73
• Shares Outstanding: 29,669,407
• 10 Day Avg. Volume: 518,600
• 30 Day Avg. Volume: 536,350
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.77
• Price to Cash Flow (P/CF): 19.70
• P/FCF Ratio: 21.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $232.69
• Price Target Upside: 29.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Inspire Medical Systems has a strong financial performance with significant revenue growth, improved profitability, and a robust balance sheet. However, technical indicators suggest caution due to bearish trends. Valuation appears high, and while the earnings call provides a positive outlook, potential challenges like the DOJ investigation and reimbursement complexities introduce some risk. These factors combine to give a moderate overall score.

Positive Factors

Guidance and Estimates

INSP reiterated its FY25 sales guidance and issued new EPS guidance above consensus.

Sales and Profitability

INSP reported strong operating leverage and profitability with 4Q sales in line with expectations and material margins/EPS outperformance.

Negative Factors

DOJ Investigation

A civil investigative demand from the DOJ regarding marketing, promotional, and reimbursement practices is likely driving post-market softness.

Launch Delays

Few Inspire V U.S. procedures have been performed to-date, and reimbursement details were sparse, raising concerns that V's launch is off to a slow start.

Inspire Medical Systems Business Overview & Revenue Model

Company Description

Inspire Medical Systems, Inc. (INSP) is a medical technology company that focuses on the development and commercialization of innovative solutions for the treatment of obstructive sleep apnea (OSA). The company specializes in providing minimally invasive therapy through its proprietary Inspire therapy, an implantable device that stimulates the hypoglossal nerve to maintain an open airway during sleep. Headquartered in the United States, Inspire Medical Systems operates within the healthcare and medical devices sector, offering a novel approach to managing sleep disorders, particularly for patients who are unable to tolerate continuous positive airway pressure (CPAP) therapy.

How the Company Makes Money

Inspire Medical Systems generates revenue primarily through the sale of its Inspire therapy system, which includes the implantable device, external components, and accessories. The company's business model is centered around direct sales to hospitals and healthcare providers who perform the implantation procedure. Revenue is further supported by the provision of training and support services for medical professionals to ensure successful adoption and usage of the therapy. Additionally, Inspire Medical Systems may benefit from strategic partnerships with healthcare institutions and collaborations with research organizations to enhance product development and market reach. Reimbursement from insurance companies for the Inspire therapy procedure also plays a crucial role in the company’s financial performance, as it influences the adoption rate among eligible patients.

Inspire Medical Systems Financial Statement Overview

Summary

Inspire Medical Systems exhibits strong revenue growth and improved profitability margins. The balance sheet shows a healthy equity base with low financial leverage, although increasing liabilities pose a potential risk. The company has demonstrated significant improvement in cash flow operations, reflecting efficient capital management. Overall, Inspire Medical Systems is on a positive financial trajectory, recovering well from past challenges.

Income Statement

Inspire Medical Systems has demonstrated strong revenue growth, with a notable increase from $115.38M in 2020 to $802.80M in 2024. This reflects a robust growth trajectory in its industry. Gross and net profit margins have also improved significantly, indicating enhanced operational efficiency. The EBIT and EBITDA margins have transitioned from negative to positive, highlighting an improved profitability profile. However, previous years of negative net income suggest a recovery from past operational challenges.

Balance Sheet

The company's balance sheet shows a healthy equity base, with a steady increase in stockholders' equity from $229.75M in 2020 to $689.70M in 2024. The debt-to-equity ratio remains low, indicating low financial leverage and potential stability. Additionally, the equity ratio is strong, supporting financial robustness. However, the presence of increasing liabilities over the years presents a potential risk factor.

Cash Flow

Inspire Medical Systems has demonstrated significant improvement in cash flow operations, with operating cash flow rising from negative values to $130.25M in 2024. Free cash flow has also shown substantial growth, reflecting efficient capital management. The operating cash flow to net income ratio indicates strong cash conversion capabilities. Nonetheless, the fluctuations in free cash flow in earlier years highlight past volatility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
802.80M	624.80M	407.86M	233.39M	115.38M
	Gross Profit
679.82M	528.22M	341.74M	200.12M	97.76M
	EBIT
36.08M	-40.27M	-47.59M	-39.85M	-56.21M
	EBITDA
65.03M	-17.06M	-39.69M	-38.62M	-53.16M
	Net Income Common Stockholders
53.51M	-21.15M	-44.88M	-42.04M	-57.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
445.55M	460.38M	451.41M	214.47M	234.36M
	Total Assets
808.38M	676.81M	564.88M	295.08M	281.19M
	Total Debt
30.04M	24.85M	8.87M	33.78M	30.63M
	Net Debt
-120.11M	-160.69M	-432.72M	-180.68M	-159.89M
	Total Liabilities
118.69M	104.30M	68.87M	66.04M	51.44M
	Stockholders Equity
689.70M	572.51M	496.01M	229.05M	229.75M
Cash Flow		Free Cash Flow
91.12M	1.02M	2.47M	-24.79M	-55.50M
	Operating Cash Flow
130.25M	24.65M	11.57M	-20.12M	-53.05M
	Investing Cash Flow
-113.12M	-294.82M	-19.60M	29.14M	86.63M
	Financing Cash Flow
-52.39M	13.95M	235.08M	14.95M	134.06M

Inspire Medical Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 179.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 179.36 is below the 20-day moving average (MA) of 182.71, below the 50-day MA of 186.72, and below the 200-day MA of 180.65, indicating a bearish trend. The MACD of -1.95 indicates Positive momentum. The RSI at 46.13 is Neutral, neither overbought nor oversold. The STOCH value of 27.88 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	72 Outperform	$2.22B	65.36	19.39%	―	82.74%	―
INSP	69 Neutral	$5.32B	103.47	8.48%	―	28.49%	―
NVRO	61 Neutral	$219.32M	―	-43.28%	―	-0.87%	34.15%
LIVN	54 Neutral	$2.01B	32.24	4.87%	―	8.33%	256.54%
STIM	54 Neutral	$173.50M	―	-138.47%	―	5.03%	-3.71%
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%

Inspire Medical Systems Corporate Events

Inspire Medical Systems Reports Strong Q4 2024 Revenue Growth

Inspire Medical Systems reported a 25% increase in revenue for the fourth quarter of 2024, reaching $239.7 million, and a 28% increase for the full year, totaling $802.8 million. Net income for the quarter was $35.2 million, with diluted net income per share rising by 135%. The company activated 72 new U.S. centers, bringing the total to 1,435, and created 12 new U.S. sales territories. Looking ahead, Inspire reaffirmed its 2025 revenue guidance, anticipating growth of 17% to 19%, with a revenue range of $940 million to $955 million and introduced diluted earnings per share guidance of $2.10 to $2.20. The company aims to continue its strong performance with the full launch of Inspire V and other strategic initiatives.

Inspire Medical Systems Projects Strong Revenue Growth

Inspire Medical Systems announced preliminary, unaudited results for the fourth quarter and full year 2024, reporting a 25% year-over-year revenue growth in the fourth quarter and 28% for the full year. The company also provided initial 2025 revenue guidance, projecting a 17% to 19% increase over 2024. The company highlighted strategic organizational changes, including new leadership appointments, to support continued growth and increased adoption of their neurostimulation therapy. The company is optimistic about the future, emphasizing a strong position to fuel growth and deliver value to stakeholders.