Revenue Growth and Margin Expansion
The company's revenue growth was driven by its leadership in long-term continuous monitoring, with a nearly 72% share in a segment growing in the high teens. iRhythm's EHR integration strategy has been successful, with over half of its volume flowing through EHR integrated accounts. As Daniel Wilson noted, the company expects incremental improvement in gross margin, with a range of 80 to 100 basis points of improvement relative to 2025.
Valuation and Growth Expectations
iRhythm's valuation metrics indicate a premium price, with a P/S Ratio of 6.09 and an EV/EBITDA of -597.06. Analysts estimate next year's revenue growth at 15.9%. The company's ROE is -38.33%, and the ROIC is -5.76%. The current valuation suggests that the market is pricing in significant growth expectations, and the company's ability to deliver on its guidance will be crucial in determining its stock performance.
Product Innovation and International Expansion
iRhythm advanced its predictive AI capabilities in 2025, with early pilots showing over 85% accuracy in pre-identifying patients with clinically relevant arrhythmias. The company is excited about its next-gen MCT device, currently under FDA review, which is expected to be released in the first half of 2027. Internationally, iRhythm is commercial in the U.K., select EU markets, and Japan, with a focus on disciplined execution, evidence generation, and reimbursement progression.
Guidance and Outlook
The company expects revenue to be in the range of $870 million to $880 million in 2026, representing 16% to 18% year-over-year growth. iRhythm anticipates adjusted EBITDA margin to expand meaningfully to 11.5% to 12.5% of revenue in 2026. The company's guidance suggests a continued focus on volume-led growth, expanding profitability, and investing in product and international growth.