RBC Capital cuts Inspire Medical price target to $215 from $260

On Tuesday, RBC Capital Markets adjusted its price target for Inspire Medical (TASE:BLWV) Systems (NYSE:INSP) shares, bringing it down to $215 from the previous $260. Despite the reduction, the firm maintains an Outperform rating on the stock. According to InvestingPro data, analyst targets currently range from $190 to $270, with the company scheduled to report earnings on May 5. Analysts at RBC Capital cited several factors influencing the decision, including typical first-quarter seasonality and anticipation surrounding the company’s product developments.

The analysts noted that the market sentiment for Inspire Medical Systems appears subdued as the first quarter of 2025 earnings season approaches. InvestingPro data reveals that nine analysts have recently revised their earnings expectations downward for the upcoming period, though the company maintains robust financials with a gross profit margin of 84.68% and impressive revenue growth of 28.49% in the last twelve months. They pointed to a potential pause and stocking or de-stocking activities ahead of the launch of Inspire V, although their checks do not anticipate this occurrence. Moreover, they expect the supply ramp for Inspire V to be gradual, coming online around September to October.

RBC Capital also mentioned discussions in the industry regarding procedure profitability and reimbursement issues. However, they emphasized that despite these challenges, there are positive demand trends and several upcoming catalysts that could drive the company’s growth. These include the release of Inspire V, results from the PREDICTOR study, expansion into new treatment centers, deeper market penetration, an emphasis on utilization and capacity increases, improved diagnosis rates, and the benefits from GLP-1 tailwinds.

The analysts expressed confidence in Inspire Medical Systems’ ability to maintain a double-digit growth trajectory and improve profitability. They believe the stock is currently undervalued and see substantial upside to their revised price target of $215, which they argue more accurately reflects current market multiples. This view aligns with InvestingPro’s Fair Value assessment, which suggests the stock is slightly undervalued at current levels. InvestingPro’s comprehensive analysis, including 14 additional investment tips and detailed financial metrics, is available in the Pro Research Report for deeper insights into INSP’s investment potential.

In other recent news, Inspire Medical Systems has been the focus of several analyst reports following its fourth-quarter earnings announcement. RBC Capital Markets maintained an Outperform rating with a $260 price target, highlighting that Inspire Medical’s earnings per share (EPS) exceeded consensus estimates by 57%, with revenue aligning with prior projections. UBS also reaffirmed a Buy rating with a $265 price target, noting the company’s financial health and potential for double-digit sales growth, despite ongoing scrutiny from a Department of Justice investigation. Piper Sandler kept an Overweight rating with a $233 price target, emphasizing Inspire Medical’s competitive positioning in the ENT medical procedure market and the economic incentives for surgeons using its technology.

Additionally, RBC Capital Markets updated its assessment of the impact of new tariffs on companies like Nike (NYSE:NKE), which are expected to face significant challenges due to their exposure to Southeast Asian markets. The tariffs, implemented on April 2, have increased levies on imports from several countries, affecting companies with high U.S. revenue mixes and lower gross margins. In contrast, companies like LVMH (EPA:LVMH) and Moncler are seen as less exposed due to their production locations. The medical devices sector also faces potential headwinds from universal tariffs, although U.S.-based companies or those with exemptions may be less affected. These developments underscore the varying impacts of tariffs across different sectors and companies.

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