Street Calls of the Week
Investing.com - Jefferies downgraded Inspire Medical Systems (NYSE:INSP) from Buy to Hold on Friday, while significantly reducing its price target to $85.00 from $160.00. The stock, currently trading at $80.17, has declined over 50% in the past six months, according to InvestingPro data.
The downgrade follows Jefferies’ U.S. sleep survey and consultations with sleep and ENT doctors, which indicated ongoing headwinds from GLP-1 medication uptake and competitor share gains in the sleep apnea treatment market. Despite these challenges, InvestingPro data shows the company maintains strong fundamentals with a "GREAT" overall financial health score and robust revenue growth of 22% in the last twelve months.
Jefferies analyst Michael Sarcone noted "muted expectations" regarding volume growth related to the company’s Inspire 5 product line, contributing to the more cautious outlook.
The research firm cited concerns about physician reimbursement issues and pointed to "a recent history of execution challenges" at the medical device company, which specializes in treatments for sleep apnea.
Jefferies no longer expects Inspire Medical Systems to accelerate sales growth to medium-term target levels and does not anticipate multiple expansion driving share price upside for the stock.
In other recent news, Inspire Medical Systems has reported positive clinical data for its Inspire V system, demonstrating favorable outcomes for patients with obstructive sleep apnea. The results, gathered from a study in Singapore and a limited U.S. market release, are being showcased at medical conferences in Indianapolis. Meanwhile, Evercore ISI has initiated coverage on Inspire Medical Systems with an Outperform rating and set a price target of $150, citing the company’s strong growth outlook and significant market potential. In a leadership update, Inspire Medical’s Chief Financial Officer Rick Buchholz will step down at the end of 2025, although he will remain in a financial advisory role until February 2026 to aid in a smooth transition. KeyBanc has maintained its Sector Weight rating on the stock amidst this leadership change. Additionally, Inspire Medical has authorized a $200 million stock buyback program, which will run through August 2027. This move allows the company to repurchase shares at its discretion, potentially impacting its capital structure and shareholder value. These developments reflect Inspire Medical’s ongoing strategic initiatives and market positioning.
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