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Inspire (INSP) Down 3.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Inspire Medical Systems (INSP - Free Report) . Shares have lost about 3.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Inspire due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
INSP Stock Gains Following Q3 Earnings Beat, Gross Margin Contracts
Inspire Medical delivered an earnings per share of 60 cents in third-quarter 2024 against the year-ago period’s loss of 29 cents per share. The metric surpassed the Zacks Consensus Estimate by a huge 900%.
INSP’s Revenues in Detail
Inspire Medical registered revenues of $203.2 million in the third quarter, up 32.5% year over year. The figure beat the Zacks Consensus Estimate by 2.8%.
Per management, the top-line growth was driven by increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system. However, this was partially offset by ENT surgeon capacity constraints.
Shares of this company gained nearly 3.3% in yesterday’s after-hours trading.
Inspire Medical’s Segment Details
Inspire Medical’s operations consist of two geographic regions — the United States and All other countries.
For the quarter under review, U.S. revenues of $195.8 million reflected an increase of 32.8% from the year-ago quarter on a reported basis. Per management, this upside reflects an increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system.
During the reported quarter, Inspire Medical activated 66 new U.S. centers, thus bringing the total to 1,371 U.S. medical centers providing Inspire therapy. The company also created 13 new U.S. sales territories in the quarter, bringing the total to 323 U.S. sales territories.
Revenues from outside the United States totaled $7.4 million, up 27.2% year over year on a reported basis. This was primarily driven by an increased market penetration in existing centers, the expansion of INSP’s European sales representatives into new territories and centers, the start of reimbursed procedures in France and increased physician and patient awareness of the Inspire system.
INSP’s Margin Analysis
In the third quarter, Inspire Medical’s gross profit increased 32.5% to $170.8 million. However, the gross margin contracted 4 basis points to 84.1%.
SG&A expenses jumped 15.1% to $130.4 million. R&D expenses decreased 10.5% year over year to $26.1 million. Operating expenses of $156.5 million increased 9.9% year over year.
Operating profit totaled $14.3 million against the prior-year quarter’s operating loss of $13.5 million.
Inspire Medical’s Financial Position
Inspire Medical exited third-quarter 2024 with cash and cash equivalents and short-term investments of $410.9 million compared with $439.7 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $61.1 million compared with $7.4 million a year ago.
INSP’s Outlook
Inspire Medical has revised its outlook for 2024.
The company now projects revenues in the range of $793 million-$798 million (representing growth of 27-28% from 2023 levels), narrowed from the previous outlook of $788 million-$798 million (reflecting growth of 26-28% from 2023 levels). The Zacks Consensus Estimate is pegged at $796.1 million.
Inspire Medical reiterated its plans to open 52-56 new U.S. medical centers providing Inspire therapy and add 12-14 new U.S. sales territories during the fourth quarter of 2024.
The company now expects its earnings per share for 2024 to be between $1.20 and $1.40, up from the prior outlook of 60 cents-80 cents. The Zacks Consensus Estimate is pegged at 75 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Inspire has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Inspire has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Inspire (INSP) Down 3.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Inspire Medical Systems (INSP - Free Report) . Shares have lost about 3.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Inspire due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
INSP Stock Gains Following Q3 Earnings Beat, Gross Margin Contracts
Inspire Medical delivered an earnings per share of 60 cents in third-quarter 2024 against the year-ago period’s loss of 29 cents per share. The metric surpassed the Zacks Consensus Estimate by a huge 900%.
INSP’s Revenues in Detail
Inspire Medical registered revenues of $203.2 million in the third quarter, up 32.5% year over year. The figure beat the Zacks Consensus Estimate by 2.8%.
Per management, the top-line growth was driven by increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system. However, this was partially offset by ENT surgeon capacity constraints.
Shares of this company gained nearly 3.3% in yesterday’s after-hours trading.
Inspire Medical’s Segment Details
Inspire Medical’s operations consist of two geographic regions — the United States and All other countries.
For the quarter under review, U.S. revenues of $195.8 million reflected an increase of 32.8% from the year-ago quarter on a reported basis. Per management, this upside reflects an increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system.
During the reported quarter, Inspire Medical activated 66 new U.S. centers, thus bringing the total to 1,371 U.S. medical centers providing Inspire therapy. The company also created 13 new U.S. sales territories in the quarter, bringing the total to 323 U.S. sales territories.
Revenues from outside the United States totaled $7.4 million, up 27.2% year over year on a reported basis. This was primarily driven by an increased market penetration in existing centers, the expansion of INSP’s European sales representatives into new territories and centers, the start of reimbursed procedures in France and increased physician and patient awareness of the Inspire system.
INSP’s Margin Analysis
In the third quarter, Inspire Medical’s gross profit increased 32.5% to $170.8 million. However, the gross margin contracted 4 basis points to 84.1%.
SG&A expenses jumped 15.1% to $130.4 million. R&D expenses decreased 10.5% year over year to $26.1 million. Operating expenses of $156.5 million increased 9.9% year over year.
Operating profit totaled $14.3 million against the prior-year quarter’s operating loss of $13.5 million.
Inspire Medical’s Financial Position
Inspire Medical exited third-quarter 2024 with cash and cash equivalents and short-term investments of $410.9 million compared with $439.7 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $61.1 million compared with $7.4 million a year ago.
INSP’s Outlook
Inspire Medical has revised its outlook for 2024.
The company now projects revenues in the range of $793 million-$798 million (representing growth of 27-28% from 2023 levels), narrowed from the previous outlook of $788 million-$798 million (reflecting growth of 26-28% from 2023 levels). The Zacks Consensus Estimate is pegged at $796.1 million.
Inspire Medical reiterated its plans to open 52-56 new U.S. medical centers providing Inspire therapy and add 12-14 new U.S. sales territories during the fourth quarter of 2024.
The company now expects its earnings per share for 2024 to be between $1.20 and $1.40, up from the prior outlook of 60 cents-80 cents. The Zacks Consensus Estimate is pegged at 75 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Inspire has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Inspire has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.