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Why You Should Add Inspire Medical (INSP) to Your Portfolio
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Inspire Medical Systems, Inc. (INSP - Free Report) has been gaining from its focus on research and development (R&D). The optimism led by a solid fourth-quarter 2023 performance and its global presence are expected to contribute further. However, concerns regarding overdependence on the Inspire system and a competitive landscape prevail.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has lost 8.1% compared with the 21.8% decline of the industry. The S&P 500 has witnessed 21.7% growth in the said time frame.
The renowned medical technology company focused on obstructive sleep apnea (OSA) has a market capitalization of $7.38 billion. The company projects 51.4% growth for 2024 and expects to maintain its strong performance. Inspire Medical has delivered an earnings surprise of 353.6% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Focus on R&D: Inspire Medical’s foundational commitment to driving innovation and improving patient lives fuels its continuous product development, raising our optimism. Per management, the company intends to invest in existing and next-generation technologies to further improve its products and clinical outcomes, optimize patient acceptance and comfort and broaden the patient population that can benefit from Inspire therapy.
Global Presence: Inspire Medical’s management is currently planning to continue to expand the size and geographic scope of the company’s direct sales organization to generate future revenue growth. This looks promising for the stock.
During 2023, Inspire Medical activated 280 U.S. centers bringing the total to 1,180 U.S. medical centers implanting Inspire therapy as of Dec 31, 2023. It also created 62 new U.S. sales territories during 2023, bringing the total to 287 U.S. territories as of Dec 31, 2023.
Strong Q4 Results: Inspire Medical’s solid fourth-quarter 2023 results buoy our optimism. The company recorded a robust improvement in the top and bottom lines. Strength in year-over-year U.S. revenues was seen. The gross margin expansion, despite rising product costs, was also witnessed.
Downsides
Overdependence on Inspire System: Sales of Inspire Medical’s Inspire system accounted for primarily all its revenues for the past few years. Its ability to execute its growth strategy and become profitable will, therefore, depend upon the adoption of Inspire therapy to treat moderate-to-severe OSA in patients who are unable to use or get consistent benefits from continuous positive airway pressure. Management cannot ensure that the company’s Inspire therapy will achieve or maintain broad market acceptance among physicians and patients.
Competitive Landscape: The medical technology industry is highly competitive, subject to change and significantly affected by new product introductions and other activities of industry participants. Inspire Medical’s competitors have historically dedicated and will continue to dedicate significant resources to promote their products or develop new products or methods to treat moderate to severe OSA. Inspire Medical considers its primary competition to be other neurostimulation technologies designed to treat OSA.
Estimate Trend
Inspire Medical has been witnessing a positive estimate revision trend for 2024. In the past 90 days, the Zacks Consensus Estimate for its loss per share has narrowed from 75 cents to 35 cents.
The Zacks Consensus Estimate for the company’s first-quarter 2024 revenues is pegged at $161.6 million, suggesting a 26.4% improvement from the year-ago quarter’s reported number.
Other Key Picks
A few other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Ecolab Inc. (ECL - Free Report) and Cencora, Inc. (COR - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 51.6% compared with the industry’s 10% rise in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.5% against the industry’s 9.9% decline in the past year.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.7%.
Cencora’s shares have rallied 44.7% compared with the industry’s 0.4% rise in the past year.
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Why You Should Add Inspire Medical (INSP) to Your Portfolio
Inspire Medical Systems, Inc. (INSP - Free Report) has been gaining from its focus on research and development (R&D). The optimism led by a solid fourth-quarter 2023 performance and its global presence are expected to contribute further. However, concerns regarding overdependence on the Inspire system and a competitive landscape prevail.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has lost 8.1% compared with the 21.8% decline of the industry. The S&P 500 has witnessed 21.7% growth in the said time frame.
The renowned medical technology company focused on obstructive sleep apnea (OSA) has a market capitalization of $7.38 billion. The company projects 51.4% growth for 2024 and expects to maintain its strong performance. Inspire Medical has delivered an earnings surprise of 353.6% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Focus on R&D: Inspire Medical’s foundational commitment to driving innovation and improving patient lives fuels its continuous product development, raising our optimism. Per management, the company intends to invest in existing and next-generation technologies to further improve its products and clinical outcomes, optimize patient acceptance and comfort and broaden the patient population that can benefit from Inspire therapy.
Global Presence: Inspire Medical’s management is currently planning to continue to expand the size and geographic scope of the company’s direct sales organization to generate future revenue growth. This looks promising for the stock.
During 2023, Inspire Medical activated 280 U.S. centers bringing the total to 1,180 U.S. medical centers implanting Inspire therapy as of Dec 31, 2023. It also created 62 new U.S. sales territories during 2023, bringing the total to 287 U.S. territories as of Dec 31, 2023.
Strong Q4 Results: Inspire Medical’s solid fourth-quarter 2023 results buoy our optimism. The company recorded a robust improvement in the top and bottom lines. Strength in year-over-year U.S. revenues was seen. The gross margin expansion, despite rising product costs, was also witnessed.
Downsides
Overdependence on Inspire System: Sales of Inspire Medical’s Inspire system accounted for primarily all its revenues for the past few years. Its ability to execute its growth strategy and become profitable will, therefore, depend upon the adoption of Inspire therapy to treat moderate-to-severe OSA in patients who are unable to use or get consistent benefits from continuous positive airway pressure. Management cannot ensure that the company’s Inspire therapy will achieve or maintain broad market acceptance among physicians and patients.
Competitive Landscape: The medical technology industry is highly competitive, subject to change and significantly affected by new product introductions and other activities of industry participants. Inspire Medical’s competitors have historically dedicated and will continue to dedicate significant resources to promote their products or develop new products or methods to treat moderate to severe OSA. Inspire Medical considers its primary competition to be other neurostimulation technologies designed to treat OSA.
Estimate Trend
Inspire Medical has been witnessing a positive estimate revision trend for 2024. In the past 90 days, the Zacks Consensus Estimate for its loss per share has narrowed from 75 cents to 35 cents.
The Zacks Consensus Estimate for the company’s first-quarter 2024 revenues is pegged at $161.6 million, suggesting a 26.4% improvement from the year-ago quarter’s reported number.
Other Key Picks
A few other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Ecolab Inc. (ECL - Free Report) and Cencora, Inc. (COR - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 51.6% compared with the industry’s 10% rise in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.5% against the industry’s 9.9% decline in the past year.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.7%.
Cencora’s shares have rallied 44.7% compared with the industry’s 0.4% rise in the past year.