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On Tuesday, Leerink Partners made a slight adjustment to the price target of Inspire Medical Systems (NYSE:INSP), raising it from $193.00 to $194.00, while keeping a Market Perform rating on the stock. According to InvestingPro data, analyst targets for INSP range from $190 to $270, with the stock currently trading at $181. The change comes in the wake of the company’s fourth-quarter earnings report for 2024, where Inspire Medical (TASE:PMCN) also discussed a new investigation by the Department of Justice (DOJ).
Leerink Partners’ analysts cited an updated model and a marginally lower share count following the company’s earnings release as the reasons for the price target increase. Despite this adjustment, they expect shares to encounter increased volatility due to the newly disclosed DOJ investigation. The stock has already taken a significant hit, down 8.3% over the past week according to InvestingPro data. Management has provided limited details about the probe but has indicated that they do not foresee any impact on the company’s operations or product delivery.
Inspire Medical reported fourth-quarter earnings that were in line with their early January pre-announcement and reiterated their full-year 2025 sales guidance of $940-955 million. The company also introduced an initial earnings per share (EPS) guidance for the full year of 2025, projecting $2.10-2.20, which is approximately 9% higher than the consensus estimate of $1.97.
While some investors might have anticipated more aggressive operating margin growth in FY25 after a strong performance in the fourth quarter of 2024, Leerink analysts suggest that Inspire Medical could still have potential for profitability improvement. The analysts concluded by emphasizing the significance of the commercial launch of tirzepatide in obstructive sleep apnea (OSA) as a key factor for investors to monitor, alongside the unfolding situation with the DOJ investigation.
In other recent news, Inspire Medical Systems has been the subject of several analysts’ reports. Piper Sandler adjusted its price target for the company’s shares to $233, maintaining an Overweight rating, following discussions with high-volume implanters of Inspire Medical’s devices. Similarly, KeyBanc Capital Markets lowered its price target to $234 but also kept an Overweight rating. The adjustment followed the announcement of Inspire Medical’s anticipated fourth-quarter revenues, which slightly exceeded KeyBanc’s projection. Furthermore, Stifel analysts reduced their price target to $190, maintaining a Hold rating on the stock.
On the other hand, Inspire Medical reported its fourth-quarter revenues between $239.5 million and $239.7 million. The company also projected sales for the year 2025 to be in the range of $940 million to $955 million. Notably, the company is in the process of rolling out its next-generation Inspire V implant, with a full U.S. market launch expected around the third quarter of 2025.
Despite these developments, Inspire Medical’s stock experienced a decline, which Piper Sandler views as an opportunity for investors to purchase at a lower price. The company’s fifth-generation product, expected to gain momentum with a full launch targeted for the second half of 2025, is anticipated to shorten procedure times and increase throughput. These are the recent developments for Inspire Medical Systems.
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