It has been about a month since the last earnings report for Inspire Medical Systems (INSP Quick QuoteINSP - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.

But investors have to be wondering, 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 latest earnings report in order to get a better handle on the important catalysts.

Inspire Medical Q2 Earnings Beat Estimates, ’26 View Raised

Inspire Medical Systems, Inc. reported second-quarter 2026 adjusted earnings per share of 14 cents, down 58.8% year over year. The figure beat the Zacks Consensus Estimate of a loss of 22 cents by 163.6%.

GAAP earnings per share in the quarter were 1 cent compared to GAAP loss per share of 12 cents in the year-ago quarter.

INSP’s Q2 Revenues in Detail

Inspire Medical registered revenues of $200.6 million in the second quarter, down 7.6% year over year. The figure beat the Zacks Consensus Estimate by 2.9%.

The decline in sales was primarily caused by a decrease in U.S. revenues due to coding and reimbursement challenges. This was partly offset by an increase in international revenues.

As of June 30, 2026, INSP operated 280 U.S. sales territories and employed 301 field clinical representatives compared with 295 territories and 275 representatives at the end of 2025.

INSP’s Q2 Revenue Mix Reflects U.S. Pressure

In the second quarter, U.S. revenues totaled $187.3 million, down 9.6% year over year. Management attributed the weakness primarily to the evolving coding and reimbursement environment, which slowed prior-authorization activity and procedure volumes.

International revenues totaled $13.3 million, up 33.6% year over year. The overseas gain partly offset the domestic decline, but the United States remained the dominant contributor to quarterly sales.

INSP’s Margin Analysis

In the second quarter, Inspire Medical’s gross profit decreased 6% year over year to $171.5 million. The gross margin expanded 150 basis points to 85.5%, primarily driven by a higher sales mix of the Inspire V system.

Selling, general and administrative expenses decreased 7.7% year over year to $147.3 million. Research and development expenses declined 5.8% to $24.7 million. Operating expenses of $171.9 million decreased 7.4% year over year.

Adjusted operating profit decreased 66.8% year over year to $3.2 million. The adjusted operating margin contracted 280 basis points to 1.6%.

Inspire Medical’s Financial Position

Inspire Medical exited the second quarter of 2026 with cash and cash equivalents and short-term investments of $320.7 million compared with $283.8 million at the end of first-quarter 2026.

Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $36.1 million, compared with the cumulative net cash used in operating activities of $4 million a year ago.

Inspire Medical Raises 2026 Outlook

Inspire Medical has updated its revenue and earnings per share outlook for 2026.

The company raised its revenue guidance to $835 million-$875 million from the previously projected $825 million-$875 million. The Zacks Consensus Estimate is pegged at $851.2 million.

INSP now expects adjusted earnings per share for 2026 in the range of $1.05-$1.45, up from the prior guidance of $0.75-$1.25. The company projects an adjusted operating margin of 4-6%. The Zacks Consensus Estimate is pegged at $1.24 per share.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -49.19% due to these changes.

VGM Scores

At this time, Inspire has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inspire has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Inspire belongs to the Zacks Medical Info Systems industry. Another stock from the same industry, Tempus AI (TEM Quick QuoteTEM - Free Report) , has gained 32.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Tempus reported revenues of $382.49 million in the last reported quarter, representing a year-over-year change of +21.6%. EPS of -$0.04 for the same period compares with -$0.22 a year ago.

Tempus is expected to post a loss of $0.07 per share for the current quarter, representing a year-over-year change of +36.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Tempus. Also, the stock has a VGM Score of F.