Inspire Medical Systems, Inc. (INSP) | Investment Case

1. Company Snapshot

1.a. Company Description

Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally.The company offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA.It also develops a novel, a closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway.

The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.

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1.b. Last Insights on INSP

Inspire Medical Systems, Inc. faced several challenges recently. A class action lawsuit was filed against the company and certain senior executives for securities fraud, alleging potential violations of federal securities laws. The lawsuit claims that Inspire Medical Systems misrepresented or failed to disclose issues with the Inspire V launch, including poor demand and critical launch issues. Additionally, the company's Q4 earnings beat was overshadowed by a lower 2026 revenue outlook. Furthermore, New York State Common Retirement Fund trimmed its holdings in Inspire Medical Systems by 73.7% in the third quarter.

1.c. Company Highlights

Last Price	58.29
Change Percentage	-2.08%
Open	59.35
Previous Close	59.53
Market Cap ( Millions)	1694
Volume	729161
Year High	197.75
Year Low	53.11
M A 50	89.26
M A 200	103.25

FCF Yield	4.63%
Dividend Yield	0.00%
ROE	21.07%
Debt / Equity	7.96%
Net Debt / EBIDTA	-61.10%
Price To Book	2.16
Price Earnings Ratio	11.6
Price To FCF	21.58
Price To sales	1.86
EV / EBITDA	23.65

2. Inspire Medical Systems' Q4 2025 Earnings: Navigating Reimbursement Uncertainty

Inspire Medical Systems reported a strong fourth quarter, with revenue increasing 12% to $269 million, and full-year revenue rising 14% to $912 million. The company's operating margin improved, driven by sales leverage and a higher mix of Inspire 5 systems. Earnings per share (EPS) came in at $1.65, significantly beating estimates of $0.69. The company's cost discipline and higher sales mix contributed to the beat. As Tim Herbert, Chairman and CEO, noted, the Inspire 5 system has demonstrated superiority over its predecessor, with reduced surgical time and improved outcomes.

Publication Date: Feb -17

                                    📋 Highlights
                                    Coding Transition Impact::
                                                Shift to CPT code 64582 with -52 modifier reduces professional fees by 10–50%, potentially limiting physician adoption of Inspire 5 procedures.
2025 Financial Performance::
                                                Q4 revenue rose 12% to $269M, full-year revenue grew 14% to $912M, with 2026 guidance revised to $950M–$1B (4–10% growth) amid reimbursement uncertainty.
Product Advancement::
                                                Inspire 5 reduced surgical time and improved outcomes (AHI, inspiratory overlap), with 90%+ SleepSync onboarding and 95%+ center contracting completed.
Reimbursement Strategy::
                                                Dual-path approach: short-term MAC negotiations to minimize -52 modifier impact and long-term pursuit of a new Category I CPT code by 2028.
Operational Efficiency::
                                                Cost discipline and Inspire 5 sales mix drove 40%+ EPS growth in Q4, with adjusted operating margin expansion and strong gross profit margins.

                                

Reimbursement Challenges and Guidance

The company faced a significant challenge with the coding for the Inspire 5 procedure, which will now use CPT code 64582 with a -52 modifier, potentially reducing the professional fee by 10% to 50%. Inspire Medical Systems has guided revenue growth of 4-10% for 2026, citing reimbursement uncertainty. The company's efforts to minimize the reduction in reimbursement are ongoing, with a focus on working with payers and physician groups. Analysts estimate next year's revenue growth at 8.8%.

Valuation and Future Prospects

With a P/E Ratio of 11.89 and an EV/EBITDA of 25.6, the market appears to be pricing in moderate growth expectations. The company's ROE of 21.07% and ROIC of 6.28% indicate a relatively efficient use of capital. As Inspire Medical Systems navigates the reimbursement landscape and continues to drive adoption of the Inspire 5 system, its strong product profile and improving operational metrics position it for potential long-term success.

Operational Highlights and Outlook

The company has made significant progress in the fourth quarter, completing physician training and contracting over 95% of centers. The Inspire 5 system's reliability continues to improve year over year. Inspire Medical Systems expects to drive consistency and predictability by working with societies and physician groups to minimize the reduction in reimbursement. The company's focus on cost discipline and its efforts to address the reimbursement challenges will be crucial in achieving its guidance.

3. NewsRoom

Inspire Medical Investigation Initiated: Kahn Swick & Foti, LLC Investigates the Officers and Directors of Inspire Medical Systems, Inc. - INSP

Feb -14

Source: prnewswire.com

Inspire Medical: Still A Long Way From A Good Night's Sleep

Feb -12

Source: seekingalpha.com

INSP Stock Falls Despite Q4 Earnings Beat, Gross Margin Expands

Feb -12

Source: zacks.com

Inspire Medical Systems, Inc. (INSP) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

Inspire Medical Systems (INSP) Beats Q4 Earnings and Revenue Estimates

Feb -11

Source: zacks.com

Inspire Medical Systems, Inc. Announces Fourth Quarter and Full Year 2025 Financial Results

Feb -11

Source: globenewswire.com

Inspire (INSP) Q4 Earnings Preview: What You Should Know Beyond the Headline Estimates

Feb -10

Source: zacks.com

Inspire Medical Systems, Inc. $INSP Shares Sold by New York State Common Retirement Fund

Feb -08

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.43%)

6. Segments

Neurostimulation Technology

Expected Growth: 10.43%

Inspire Medical Systems' Neurostimulation Technology growth is driven by increasing adoption in sleep apnea treatment, expanding insurance coverage, and growing awareness of the technology's efficacy in treating obstructive sleep apnea. Additionally, the company's strong sales force and strategic partnerships contribute to the 10.43% growth rate.

7. Detailed Products

Inspire Upper Airway Stimulation (UAS) Therapy

A minimally invasive treatment for moderate to severe obstructive sleep apnea (OSA) that works inside the body to stimulate the tongue and other muscles to keep the airway open during sleep.

Inspire Senza System

A fully implanted system that includes a small generator, a sensing lead, and a stimulation lead that work together to monitor and stimulate the tongue and other muscles to keep the airway open during sleep.

Inspire Sleep Apnea Treatment

A comprehensive treatment solution that includes the Inspire Upper Airway Stimulation (UAS) Therapy and the Inspire Senza System, providing a complete solution for patients with OSA.

8. Inspire Medical Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Inspire Medical Systems, Inc. has a low threat of substitutes due to its unique product offerings and patented technology, making it difficult for competitors to replicate.

Bargaining Power Of Customers

Inspire Medical Systems, Inc. has a medium bargaining power of customers due to the presence of a few large customers, but the company's products are highly specialized and critical to their operations.

Bargaining Power Of Suppliers

Inspire Medical Systems, Inc. has a low bargaining power of suppliers due to its ability to negotiate prices and terms with its suppliers, and the availability of alternative suppliers.

Threat Of New Entrants

Inspire Medical Systems, Inc. has a high threat of new entrants due to the growing demand for sleep apnea treatments and the potential for new companies to enter the market with innovative products.

Intensity Of Rivalry

Inspire Medical Systems, Inc. operates in a moderately competitive market, with a few established players, but the company's unique products and strong brand recognition help to differentiate it from competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	4.16%
Debt Cost	3.95%
Equity Weight	95.84%
Equity Cost	10.69%
WACC	10.41%
Leverage	4.34%

11. Quality Control: Inspire Medical Systems, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Insulet

A-Score: 5.3/10

Value: 0.2

Growth: 9.6

Quality: 7.9

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

CONMED

A-Score: 4.8/10

Value: 7.4

Growth: 6.4

Quality: 5.9

Yield: 3.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

Inari Medical

A-Score: 4.8/10

Value: 4.0

Growth: 8.0

Quality: 4.8

Yield: 0.0

Momentum: 9.5

Volatility: 2.3

1-Year Total Return ->

Bio-Rad

A-Score: 4.0/10

Value: 6.5

Growth: 2.3

Quality: 4.7

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

Inspire Medical Systems

A-Score: 3.2/10

Value: 1.1

Growth: 9.4

Quality: 6.9

Yield: 0.0

Momentum: 0.0

Volatility: 1.7

1-Year Total Return ->

Integra LifeSciences

A-Score: 3.0/10

Value: 8.3

Growth: 2.3

Quality: 4.1

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.93%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.41%

Inspire Medical Systems, Inc. - US4577301090

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on INSP

1.c. Company Highlights

Higher Growth

Expensive

Stable Momentum

Earnings Beats

Revenues Beats

Fairly Valued

Weak Momentum

Average Quality

Better Quality

Revenues Miss

2. Inspire Medical Systems' Q4 2025 Earnings: Navigating Reimbursement Uncertainty

Reimbursement Challenges and Guidance

Valuation and Future Prospects

Operational Highlights and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.43%)

6. Segments

Neurostimulation Technology

Expected Growth: 10.43%

7. Detailed Products

Inspire Upper Airway Stimulation (UAS) Therapy

Inspire Senza System

Inspire Sleep Apnea Treatment

8. Inspire Medical Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Inspire Medical Systems, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

58.29$

Current Price

58.29$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA