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On Tuesday, Morgan Stanley (NYSE:MS) adjusted its outlook on Inspire Medical Systems (NYSE:INSP), reducing the price target from $230.00 to $220.00, yet continuing to endorse the stock with an Overweight rating. The firm’s assessment follows a period where Inspire Medical (TASE:PMCN) ended the year on a positive note, with profitability surpassing expectations. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.23/5, with revenue growing at an impressive 32.5% over the last twelve months.
The analysts at Morgan Stanley noted that both the existing and new guidance provided by Inspire Medical appear conservative, suggesting there might be room for positive performance. They also mentioned that the Central Initiator Device (CID) posed a mild annoyance but considered it to be manageable within the company’s operations. InvestingPro analysis reveals that 5 analysts have recently revised their earnings upward for the upcoming period, supporting this optimistic outlook.
Despite the slight decrease in the price target, Morgan Stanley’s stance on Inspire Medical remains positive. The analysts expressed their approval of the stock, particularly in light of its current valuation, stating, "Trading at 4.5x ’26 sales, we like this name and remain OW w/ new PT of $220." The company’s strong fundamentals are reflected in its robust gross profit margin of 84.8% and current ratio of 7.84, indicating solid operational efficiency and liquidity. For deeper insights into INSP’s valuation and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.
The Overweight rating indicates that Morgan Stanley’s analysts believe Inspire Medical stock has the potential to outperform the average total return of the stocks in the analyst’s coverage universe over the next 12 to 18 months. The new price target of $220.00 reflects a slight adjustment to their expectations, taking into account the latest developments and financial results reported by the company.
In their commentary, Morgan Stanley emphasized the company’s performance and the conservative nature of its guidance, which could suggest confidence in Inspire Medical’s ability to continue its profitable trajectory. This perspective offers investors a view of the company’s potential in the coming years, underlined by the firm’s maintained Overweight rating.
In other recent news, Inspire Medical Systems has been the focus of several analyst adjustments following their Q4 earnings report and the announcement of a Department of Justice (DOJ) investigation. Piper Sandler maintained an Overweight rating on the company’s stock, highlighting strong Q4 earnings per share (EPS) of $1.15, which surpassed both their projection and consensus estimates. The firm also noted Inspire Medical’s revenue guidance for 2025, ranging from $940 to $955 million, and an initial EPS guidance for FY25 between $2.10 and $2.20.
Leerink Partners adjusted their price target for Inspire Medical from $193.00 to $194.00, while maintaining a Market Perform rating. They cited an updated model and a marginally lower share count following the company’s earnings release as reasons for the price target increase. Leerink also acknowledged the potential for increased share volatility due to the DOJ investigation, but emphasized the company’s potential for profitability improvement.
KeyBanc Capital Markets lowered their price target on Inspire Medical to $234 from $236, while maintaining an Overweight rating. This followed the company’s pre-announcement of its Q4 results and initial guidance for 2025. The company’s projected sales for 2025 are in the range of $940 million to $955 million.
Stifel analysts reduced their price target for Inspire Medical to $190 from $200 and maintained a Hold rating. They cited fluctuating stock performance and concerns about future revenue growth as reasons for the adjustment. Despite these developments, all firms emphasized the importance of monitoring the ongoing DOJ investigation and the commercial launch of new products.
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