We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
INSP's 28.1% Past-Month Rally Raises a Key Question for Investors
Read MoreHide Full Article
Key Takeaways
Inspire Medical shares gained 28.1% in a month after an earnings beat and higher 2026 guidance.
Inspire V lifted second-quarter gross margin 150 basis points to 85.5% despite lower revenues.
Coding and prior authorization issues cut quarterly revenues by about $40 million and remain a key risk.
Inspire Medical Systems, Inc. (INSP - Free Report) shares have gained 28.1% in the past month, shifting attention to whether improving earnings expectations can support additional upside.
The rally follows a quarterly earnings beat, higher 2026 guidance and favorable estimate revisions. Reimbursement disruption, however, continues to limit procedure volumes and near-term revenue growth.
Inspire’s Earnings Beat Reset Expectations
Second-quarter adjusted earnings per share of 14 cents surpassed the Zacks Consensus Estimate for a loss of 22 cents. Revenues of $200.6 million also exceeded expectations despite declining 7.6% year over year.
Disciplined spending helped offset the sales decline. Adjusted operating income reached $3.2 million, while operating cash flow improved to $23.2 million, showing that Inspire protected profitability and cash generation during a difficult operating period.
Management raised its 2026 revenue outlook to $835-$875 million and increased adjusted earnings guidance to $1.05-$1.45 per share. The company also expects an adjusted operating margin of 4%-6%.
The Zacks Consensus Estimate for 2026 earnings increased 34.7% over the past four weeks. That revision helps explain the improved sentiment, although the current consensus estimate of 93 cents remains below management’s adjusted guidance range.
Image Source: Zacks Investment Research
Inspire V Is Strengthening Gross Margin
A higher sales mix of Inspire V systems lifted second-quarter gross margin 150 basis points to 85.5%. The improvement came even as quarterly revenues declined, underscoring the next-generation platform’s favorable product economics.
Inspire V represented the large majority of implants during the quarter. Continued adoption could support margins as reimbursement conditions stabilize and procedure activity recovers.
INSP Still Faces Reimbursement Friction
Coding challenges and the WISeR prior authorization program reduced second-quarter revenues by approximately $40 million. Management expects a $120-$130 million full-year impact and forecasts an 8%-10% revenue decline in the third quarter.
The pressure also shapes the competitive backdrop. ResMed Inc. (RMD - Free Report) remains a major provider of continuous positive airway pressure systems for obstructive sleep apnea, while Eli Lilly and Company (LLY - Free Report) markets Zepbound for adults with moderate-to-severe obstructive sleep apnea and obesity. These alternatives can influence treatment sequencing and patient conversion.
Inspire’s Valuation Tests the Rally
INSP trades at about 2.1X forward 12-month sales, below its five-year median of 7.1X and the medical information systems industry’s 5.1X multiple. The discount leaves room for recovery if operating trends improve.
Further gains likely require clearer evidence that U.S. procedure volumes and revenues are normalizing. A low multiple alone may not offset uncertainty around coding, prior authorization delays and the pace of reimbursement improvement.
INSP’s Mixed Scores Temper the Rally
The rally has improved the setup, but the risk-reward picture remains balanced. Earnings revisions, guidance and Inspire V margins support the recovery case, while reimbursement friction argues against assuming that the rebound is complete.
Image Source: Zacks Investment Research
In the year-to-date period, shares of Inspire Medical dropped 34% compared with the industry’s 5.9% decline. It currently carries a Zacks Rank #3 (Hold). Its Growth Score of B and VGM Score of B point to favorable growth characteristics, but its Value Score of C and Momentum Score of C are less supportive. The combination favors a measured stance after the sharp past-month advance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
INSP's 28.1% Past-Month Rally Raises a Key Question for Investors
Key Takeaways
Inspire Medical Systems, Inc. (INSP - Free Report) shares have gained 28.1% in the past month, shifting attention to whether improving earnings expectations can support additional upside.
The rally follows a quarterly earnings beat, higher 2026 guidance and favorable estimate revisions. Reimbursement disruption, however, continues to limit procedure volumes and near-term revenue growth.
Inspire’s Earnings Beat Reset Expectations
Second-quarter adjusted earnings per share of 14 cents surpassed the Zacks Consensus Estimate for a loss of 22 cents. Revenues of $200.6 million also exceeded expectations despite declining 7.6% year over year.
Disciplined spending helped offset the sales decline. Adjusted operating income reached $3.2 million, while operating cash flow improved to $23.2 million, showing that Inspire protected profitability and cash generation during a difficult operating period.
Inspire Medical Systems, Inc. Price and Consensus
Inspire Medical Systems, Inc. price-consensus-chart | Inspire Medical Systems, Inc. Quote
INSP’s Guidance Supports the Improved Sentiment
Management raised its 2026 revenue outlook to $835-$875 million and increased adjusted earnings guidance to $1.05-$1.45 per share. The company also expects an adjusted operating margin of 4%-6%.
The Zacks Consensus Estimate for 2026 earnings increased 34.7% over the past four weeks. That revision helps explain the improved sentiment, although the current consensus estimate of 93 cents remains below management’s adjusted guidance range.
Image Source: Zacks Investment Research
Inspire V Is Strengthening Gross Margin
A higher sales mix of Inspire V systems lifted second-quarter gross margin 150 basis points to 85.5%. The improvement came even as quarterly revenues declined, underscoring the next-generation platform’s favorable product economics.
Inspire V represented the large majority of implants during the quarter. Continued adoption could support margins as reimbursement conditions stabilize and procedure activity recovers.
INSP Still Faces Reimbursement Friction
Coding challenges and the WISeR prior authorization program reduced second-quarter revenues by approximately $40 million. Management expects a $120-$130 million full-year impact and forecasts an 8%-10% revenue decline in the third quarter.
The pressure also shapes the competitive backdrop. ResMed Inc. (RMD - Free Report) remains a major provider of continuous positive airway pressure systems for obstructive sleep apnea, while Eli Lilly and Company (LLY - Free Report) markets Zepbound for adults with moderate-to-severe obstructive sleep apnea and obesity. These alternatives can influence treatment sequencing and patient conversion.
Inspire’s Valuation Tests the Rally
INSP trades at about 2.1X forward 12-month sales, below its five-year median of 7.1X and the medical information systems industry’s 5.1X multiple. The discount leaves room for recovery if operating trends improve.
Further gains likely require clearer evidence that U.S. procedure volumes and revenues are normalizing. A low multiple alone may not offset uncertainty around coding, prior authorization delays and the pace of reimbursement improvement.
INSP’s Mixed Scores Temper the Rally
The rally has improved the setup, but the risk-reward picture remains balanced. Earnings revisions, guidance and Inspire V margins support the recovery case, while reimbursement friction argues against assuming that the rebound is complete.
Image Source: Zacks Investment Research
In the year-to-date period, shares of Inspire Medical dropped 34% compared with the industry’s 5.9% decline. It currently carries a Zacks Rank #3 (Hold). Its Growth Score of B and VGM Score of B point to favorable growth characteristics, but its Value Score of C and Momentum Score of C are less supportive. The combination favors a measured stance after the sharp past-month advance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.