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Investing.com - Truist Securities downgraded Inspire Medical (TASE:BLWV) Systems (NYSE:INSP) from Buy to Hold and slashed its price target to $125.00 from $190.00 on Tuesday. The stock, currently trading near its 52-week low, has seen a 32% decline over the past six months. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.38, suggesting strong fundamentals despite recent market challenges.
The downgrade follows what Truist described as a "bigger than expected" guidance cut, with the firm citing multiple headwinds for the sleep apnea device maker’s Inspire V (I-5) product that will impact second-half performance. Despite these challenges, the company maintains impressive fundamentals with an 84.65% gross margin and a strong current ratio of 9.01, indicating robust operational efficiency and liquidity.
Truist noted that while there should be a path to revenue acceleration in 2026 after a rebased 12-13% growth in 2025 as launch issues resolve, the lower earnings outlook reduces the stock’s valuation floor.
The research firm expressed concern that this marks a third delay for the I-5 product, raising questions about execution and visibility amid other potential headwinds including GLP1 medication trials, upcoming competition, and constrained account capacity.
These factors could limit near-term multiple expansion for Inspire Medical Systems, with Truist indicating less confidence in estimate upside potential.
In other recent news, Inspire Medical Systems reported its second-quarter earnings for 2025, with a total revenue of $217.1 million, marking an 11% increase compared to the previous year. Despite this revenue growth, the company posted a net loss of $3.6 million and revised its full-year earnings per share (EPS) guidance downward to $0.40-$0.50 from the earlier forecast of $2.20-$2.30. Additionally, Inspire Medical Systems adjusted its 2025 revenue forecast to $900-$910 million, down from the previous range of $940-$955 million. This guidance cut prompted several Wall Street firms, including Truist Securities, JPMorgan, KeyBanc, and Nephron Research, to downgrade the company’s stock rating to hold or neutral. KeyBanc specifically downgraded Inspire Medical Systems from Overweight to Sector Weight, despite the second-quarter revenue slightly exceeding market expectations. Mizuho (NYSE:MFG) also adjusted its price target for Inspire Medical Systems, lowering it to $170.00 from $215.00, while maintaining an Outperform rating. JPMorgan further downgraded the stock from Overweight to Neutral, reducing its price target significantly to $110.00 from $195.00. These recent developments highlight the market’s cautious response to the company’s revised financial outlook.
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