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 Stock Gains 47.8% in Three Months: What's Driving the Rally?
Read MoreHide Full Article
Key Takeaways
INSP shares gain 47.8% in three months as reimbursement uncertainty eases and recovery prospects improve.
Q2 revenues reached $200.6 million, beating expectations, while adjusted EPS of 14 cents topped estimates.
Project Horizon targets $30 million in annualized savings, while new CPT codes support Inspire V adoption.
Shares of Inspire Medical Systems (INSP - Free Report) have gained 47.8% over the past three months compared with the industry’s 46.2% growth. The rally appears to reflect easing reimbursement uncertainty, better-than-expected second-quarter results, Project Horizon’s plan to redirect $30 million annually toward growth, and an October coding decision that improves the long-term outlook for Inspire V adoption. Near-term sales, however, remain disrupted.
Minneapolis, MN-based Inspire Medical is a medical technology company focused on the development and commercialization of innovative, minimally invasive solutions for patients with obstructive sleep apnea (OSA). Its proprietary Inspire system is the first FDA-approved neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA.
INSP is also scheduled to report third-quarter results on Nov. 2. The company’s earnings per share (EPS) reflect a 48.8% year-over-year decline. Third-quarter sales are likely to decline 6.5% year over year.
Image Source: Zacks Investment Research
Here, we examine the key factors that likely boosted INSP’s share price over the past three months.
Coding Clarity and Reimbursement Rules Improve the Outlook
The hypoglossal nerve stimulation (HGNS) market faced disruption in early 2026 as coding confusion made hospitals and physicians more cautious about scheduling Inspire V procedures. In June, CMS proposed 2027 facility reimbursement of $35,414 for hospital outpatient procedures, up approximately 12%, and $31,722 for ambulatory surgery centers, up 15%. Proposed physician reimbursement, however, declined about 4% to $699, leaving the final payment outlook mixed.
By August, Inspire Medical said the relevant C-codes were in place and incorporated into the WISeR system in six applicable states. Prior-authorization submissions were also improving as high-volume centers gained billing experience.
Another significant milestone was achieved on Oct. 1, when the American Medical Association approved new Category I CPT codes specifically covering single-lead HGNS procedures, including Inspire V. Set to take effect on Jan. 1, 2028, these codes are expected to improve coding consistency, although CMS valuation is still pending. This development could ease administrative complexities and improve patient access across the category.
Second-Quarter Results Restore Confidence
Coding and reimbursement disruption continued to weigh on sales, but the second-quarter results offered investors evidence that Inspire Medical was managing these headwinds better. Revenues declined 7.6% year over year to $200.6 million because of coding and reimbursement challenges, but exceeded expectations. Adjusted EPS of 14 cents also beat estimates, while operating cash flow improved to $23.2 million from $2.7 million a year earlier. Gross margin expanded 150 basis points to 85.5%, supported by a greater revenue contribution from the higher-margin Inspire V system.
Management also narrowed its estimated full-year revenue impact from coding and reimbursement disruption and WISeR to $120-$130 million. It revised its 2026 revenue outlook to $835-$875 million and set adjusted EPS guidance of $1.05-$1.45.
Although the results did not signal an immediate return to growth, the earnings beat, improving authorization trends and expectations of easing disruptions in the coming quarters provided greater clarity on the company's recovery prospects. These factors likely bolstered investor sentiment despite the year-over-year revenue decline.
Project Horizon Prioritizes Growth Investments
Alongside the results, Inspire Medical announced Project Horizon, a strategic plan expected to generate approximately $30 million in annualized capacity for reinvestment in growth initiatives. The plan combines organizational streamlining with supply-chain and production consolidation, directing resources toward patient access, education and engagement. Initiatives include prior-authorization support through SleepSync and Inspire Connect, which provide structured education and support following implantation.
Project Horizon involves $20-$25 million in pretax restructuring charges, with most actions expected to be completed by year-end. Management indicated that many patient-flow initiatives would contribute more meaningfully in 2027 and beyond. Investors may view the program as an opportunity to channel operational savings toward improving patient conversion and reviving demand, rather than relying solely on the normalization of reimbursement conditions.
Clinical Evidence Broadens the Opportunity
In June, Inspire presented complete results from its Inspire V trial, including safety and efficacy data for its accelerometer-based sensing technology. The company also highlighted research associating hypoglossal nerve stimulation with improved cardiovascular risk markers. Its PREDICTOR study suggested that some candidates could be screened for eligibility without drug-induced sleep endoscopy, potentially reducing diagnostic burden and time to treatment. Together, these findings may help physicians identify eligible patients more efficiently and reinforce the therapy’s broader clinical value.
Concerns for INSP
Despite better coding clarity, reimbursement remains a material risk. Management estimated coding and reimbursement disruption and WISeR effects could reduce 2026 revenues by $120 million to $130 million, while the full-year revenue projection remains in the range of $835-$875 million.
The new CPT codes are not scheduled to take effect until 2028, while proposed CMS physician reimbursement rates for 2027 are lower. Moreover, Project Horizon is expected to incur restructuring charges of $20-$25 million, with the anticipated growth benefits likely to emerge gradually.
INSP’s rally reflects growing investor confidence in the company’s ability to address coding-related challenges while redirecting operational savings toward improving patient access and expanding market penetration. The AMA’s approval of new CPT codes, coupled with better-than-expected earnings and supportive clinical evidence, strengthens its long-term recovery prospects. However, effective execution, final reimbursement rates and the pace of recovery in procedure volumes remain key factors to monitor.
Zacks Rank & Key Picks
Although INSP currently carries a Zacks Rank #4 (Sell), the VGM score of B reflects potential. While INSP’s Value Score of C suggests a moderate valuation premium, its Growth and Momentum Scores of B indicate potential for sustained upward momentum. However, given the stock’s current Zacks Rank of Sell, investors may prefer to remain on the sidelines and await greater clarity on coding-related issues and revenue trends during the third-quarter earnings call before making an investment decision.
Glaukos reported second-quarter 2026 EPS of 14 cents, which beat the Zacks Consensus Estimate by 50.00%. Revenues of $186 million surpassed the Zacks Consensus Estimate by 24.1%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 25.87%.
Edward Lifesciences reported second-quarter 2026 adjusted EPS of 78 cents, which beat the Zacks Consensus Estimate by 6.85%. Revenues of $1.74 billion surpassed the Zacks Consensus Estimate by 2.45%.
Edward Lifesciences has an estimated long-term earnings growth rate of 12.7%. EW’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.49%.
Globus Medical reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.
View the Zacks #1 Rank List
Image: Shutterstock
INSP Stock Gains 47.8% in Three Months: What's Driving the Rally?
Key Takeaways
Shares of Inspire Medical Systems (INSP - Free Report) have gained 47.8% over the past three months compared with the industry’s 46.2% growth. The rally appears to reflect easing reimbursement uncertainty, better-than-expected second-quarter results, Project Horizon’s plan to redirect $30 million annually toward growth, and an October coding decision that improves the long-term outlook for Inspire V adoption. Near-term sales, however, remain disrupted.
Minneapolis, MN-based Inspire Medical is a medical technology company focused on the development and commercialization of innovative, minimally invasive solutions for patients with obstructive sleep apnea (OSA). Its proprietary Inspire system is the first FDA-approved neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA.
INSP is also scheduled to report third-quarter results on Nov. 2. The company’s earnings per share (EPS) reflect a 48.8% year-over-year decline. Third-quarter sales are likely to decline 6.5% year over year.
Image Source: Zacks Investment Research
Here, we examine the key factors that likely boosted INSP’s share price over the past three months.
Coding Clarity and Reimbursement Rules Improve the Outlook
The hypoglossal nerve stimulation (HGNS) market faced disruption in early 2026 as coding confusion made hospitals and physicians more cautious about scheduling Inspire V procedures. In June, CMS proposed 2027 facility reimbursement of $35,414 for hospital outpatient procedures, up approximately 12%, and $31,722 for ambulatory surgery centers, up 15%. Proposed physician reimbursement, however, declined about 4% to $699, leaving the final payment outlook mixed.
By August, Inspire Medical said the relevant C-codes were in place and incorporated into the WISeR system in six applicable states. Prior-authorization submissions were also improving as high-volume centers gained billing experience.
Another significant milestone was achieved on Oct. 1, when the American Medical Association approved new Category I CPT codes specifically covering single-lead HGNS procedures, including Inspire V. Set to take effect on Jan. 1, 2028, these codes are expected to improve coding consistency, although CMS valuation is still pending. This development could ease administrative complexities and improve patient access across the category.
Second-Quarter Results Restore Confidence
Coding and reimbursement disruption continued to weigh on sales, but the second-quarter results offered investors evidence that Inspire Medical was managing these headwinds better. Revenues declined 7.6% year over year to $200.6 million because of coding and reimbursement challenges, but exceeded expectations. Adjusted EPS of 14 cents also beat estimates, while operating cash flow improved to $23.2 million from $2.7 million a year earlier. Gross margin expanded 150 basis points to 85.5%, supported by a greater revenue contribution from the higher-margin Inspire V system.
Management also narrowed its estimated full-year revenue impact from coding and reimbursement disruption and WISeR to $120-$130 million. It revised its 2026 revenue outlook to $835-$875 million and set adjusted EPS guidance of $1.05-$1.45.
Although the results did not signal an immediate return to growth, the earnings beat, improving authorization trends and expectations of easing disruptions in the coming quarters provided greater clarity on the company's recovery prospects. These factors likely bolstered investor sentiment despite the year-over-year revenue decline.
Project Horizon Prioritizes Growth Investments
Alongside the results, Inspire Medical announced Project Horizon, a strategic plan expected to generate approximately $30 million in annualized capacity for reinvestment in growth initiatives. The plan combines organizational streamlining with supply-chain and production consolidation, directing resources toward patient access, education and engagement. Initiatives include prior-authorization support through SleepSync and Inspire Connect, which provide structured education and support following implantation.
Project Horizon involves $20-$25 million in pretax restructuring charges, with most actions expected to be completed by year-end. Management indicated that many patient-flow initiatives would contribute more meaningfully in 2027 and beyond. Investors may view the program as an opportunity to channel operational savings toward improving patient conversion and reviving demand, rather than relying solely on the normalization of reimbursement conditions.
Clinical Evidence Broadens the Opportunity
In June, Inspire presented complete results from its Inspire V trial, including safety and efficacy data for its accelerometer-based sensing technology. The company also highlighted research associating hypoglossal nerve stimulation with improved cardiovascular risk markers. Its PREDICTOR study suggested that some candidates could be screened for eligibility without drug-induced sleep endoscopy, potentially reducing diagnostic burden and time to treatment. Together, these findings may help physicians identify eligible patients more efficiently and reinforce the therapy’s broader clinical value.
Concerns for INSP
Despite better coding clarity, reimbursement remains a material risk. Management estimated coding and reimbursement disruption and WISeR effects could reduce 2026 revenues by $120 million to $130 million, while the full-year revenue projection remains in the range of $835-$875 million.
The new CPT codes are not scheduled to take effect until 2028, while proposed CMS physician reimbursement rates for 2027 are lower. Moreover, Project Horizon is expected to incur restructuring charges of $20-$25 million, with the anticipated growth benefits likely to emerge gradually.
Inspire Medical Systems, Inc. Price and Consensus
Inspire Medical Systems, Inc. price-consensus-chart | Inspire Medical Systems, Inc. Quote
Conclusion
INSP’s rally reflects growing investor confidence in the company’s ability to address coding-related challenges while redirecting operational savings toward improving patient access and expanding market penetration. The AMA’s approval of new CPT codes, coupled with better-than-expected earnings and supportive clinical evidence, strengthens its long-term recovery prospects. However, effective execution, final reimbursement rates and the pace of recovery in procedure volumes remain key factors to monitor.
Zacks Rank & Key Picks
Although INSP currently carries a Zacks Rank #4 (Sell), the VGM score of B reflects potential. While INSP’s Value Score of C suggests a moderate valuation premium, its Growth and Momentum Scores of B indicate potential for sustained upward momentum. However, given the stock’s current Zacks Rank of Sell, investors may prefer to remain on the sidelines and await greater clarity on coding-related issues and revenue trends during the third-quarter earnings call before making an investment decision.
Some better-ranked stocks from the broader medical space are Glaukos (GKOS - Free Report) , Edward Lifesciences (EW - Free Report) and Globus Medical (GMED - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Glaukos reported second-quarter 2026 EPS of 14 cents, which beat the Zacks Consensus Estimate by 50.00%. Revenues of $186 million surpassed the Zacks Consensus Estimate by 24.1%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 25.87%.
Edward Lifesciences reported second-quarter 2026 adjusted EPS of 78 cents, which beat the Zacks Consensus Estimate by 6.85%. Revenues of $1.74 billion surpassed the Zacks Consensus Estimate by 2.45%.
Edward Lifesciences has an estimated long-term earnings growth rate of 12.7%. EW’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.49%.
Globus Medical reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.