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On Monday, Piper Sandler adjusted its price target for Inspire Medical Systems (NYSE:INSP) shares, reducing it from $233.00 down from the previous $260.00. Despite this change, the firm maintained its Overweight rating on the stock. The revision followed conversations with two high-volume U.S. implanters of Inspire Medical (TASE:PMCN)’s hypoglossal nerve stimulation (HGNS) devices. These discussions aimed to understand the current landscape of the HGNS category, including trends in procedure volumes, the reception of Inspire Medical’s Gen 5 device, reimbursement factors, and competitive dynamics. The company, currently valued at $5.4 billion, has demonstrated strong revenue growth of 32.5% over the last twelve months. According to InvestingPro data, five analysts have recently revised their earnings expectations upward for the upcoming period.
The feedback from the implanters provided a mixed outlook for Inspire Medical. On a positive note, both doctors agreed that the Gen 5 device would likely reduce the time needed for procedures, potentially increasing patient throughput. However, concerns were raised regarding the impact of reduced physician reimbursement rates. One of the implanters indicated that the extra capacity at their center might not be exclusively allocated for more Inspire Medical cases. Additionally, the potential discouragement of new ENTs from adopting the procedure due to decreased reimbursement was highlighted as a worrying factor. The company maintains strong financial health with a current ratio of 7.84 and operates with minimal debt, as revealed by InvestingPro’s comprehensive analysis, which includes 13 additional key insights available to subscribers.
Piper Sandler’s analyst emphasized the importance of continued diligence in assessing the potential effects of the Gen 5 device’s launch. While the recent findings were not as optimistic as hoped, the firm sees no reason to alter its Overweight rating at this time. The price target adjustment to $233 reflects the new information gathered from the industry checks, taking into account the concerns and potential challenges identified by the two high-volume implanters. With analyst targets ranging from $190 to $270, and the company maintaining a gross profit margin of 84.8%, investors seeking deeper insights can access the full financial health analysis and Fair Value assessment through InvestingPro’s detailed research report.
In other recent news, Inspire Medical Systems has been the subject of several analyst adjustments. KeyBanc Capital Markets lowered its price target to $234, maintaining an Overweight rating. This follows Inspire Medical’s pre-announcement of fourth-quarter revenues between $239.5 million and $239.7 million, slightly exceeding KeyBanc’s projection and FactSet consensus. The company also anticipates sales in the range of $940 million to $955 million for the year 2025.
Simultaneously, Stifel analysts reduced their price target to $190, citing concerns about initial uptake of the new product, Inspire V, and potential limited future revenue growth. Despite these concerns, Piper Sandler maintained an Overweight rating with a $260 price target, viewing the recent share value decline as an opportunity for investors.
The company is in the process of rolling out its next-generation Inspire V implant, aiming for a full U.S. market launch around the third quarter of 2025. This new device is expected to offer several improvements, including reduced procedure time, a flexible platform for future software updates, and additional electrodes targeting new stimulation areas.
In addition to product development, Inspire Medical has implemented a new organizational structure and announced key leadership changes. These recent developments reflect the company’s focus on driving continued growth and expanding its reach in the medical community.
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