Inspire Medical (INSP) | News Based Sentiment Analysis

• On October 3, 2025, Inspire Medical Systems reported better-than-expected Q2 2025 revenue of $217.09M (versus an estimate of $214.50M) and EPS of $0.45 (versus an estimate of $0.22), representing a 10.8% year-over-year increase in quarterly revenue. However, the company significantly reduced its full-year guidance, lowering EPS expectations to $0.40 - $0.50 from a prior range of $2.20 - $2.30 and revenue to $900M - $910M from $940M - $955M, due to headwinds with the Inspire V rollout.
• Following the Q2 results and guidance cut on August 5, 2025, Bragar Eagel & Squire, P.C. announced an investigation on October 3, 2025, into potential violations of federal securities laws. This investigation highlights the serious concerns surrounding the revised financial outlook and the factors contributing to the reduced guidance.
• Despite the operational momentum and gains in earnings and free cash flow, Inspire Medical Systems' stock price has remained subdued, with a 1-year total shareholder return of -0.64% as of October 3, 2025. Analysts believe the stock is potentially 45% undervalued, but it currently trades at 41.2x earnings, exceeding industry (30.1x) and peer (40.4x) averages.
• Analysts maintain a "Hold" consensus rating for Inspire Medical Systems (MarketBeat, 2.40 average score from 7 buy, 7 hold, 1 sell, as of October 1, 2025), with an average price target of $135.13 (82.39% upside from $74.09). Evercore ISI initiated an "outperform" rating with a $150.00 target on September 2nd, while Wall Street Zen downgraded to "hold" on July 26th.
• Insider sales totaled $1,027,290.00 (no purchases) as of October 1, 2025, and insiders hold 4.10% of the stock. Institutional investors hold a significant 94.91% of the stock, but Fifth Third Bancorp reduced its stake by 41.6% in Q2 2025.
• Inspire Medical Systems launched the Inspire V neurostimulation system in the United States in August 2025. While delays in the Inspire V transition were initially a concern, Medicare billing is now live and onboarding is expected to be completed by the end of Q3 2025.
• The company's P/S ratio decreased by 85% since 2022, while RPS increased by 107% and overall revenue by 111% as of October 1, 2025.

The Investment Story: Inspire Medical Systems delivered a mixed bag in October, with strong Q2 results overshadowed by a dramatic reduction in full-year guidance. While the Inspire V launch is progressing, rollout challenges continue to weigh on investor sentiment.

What It Means for Investors: The guidance cut and subsequent investigation raise concerns about the company's near-term prospects. Despite potential undervaluation, the high P/E ratio and insider selling suggest caution. Investors should closely monitor the Inspire V rollout and Medicare adoption rates.

Looking Ahead: Investors should watch for updates on the Inspire V transition, Medicare billing progress, and any further developments from the legal investigation. The next earnings report will be crucial in assessing whether the company can regain investor confidence.

The Bottom Line: Inspire Medical Systems remains a high-risk, high-reward investment. While the long-term potential is significant, the current challenges and uncertainty surrounding the guidance require a cautious approach.