Inspire Medical authorizes $200 million stock buyback program

MINNEAPOLIS - Inspire Medical Systems, Inc. (NYSE:INSP), currently trading near its 52-week low at $79.14, announced Monday that its Board of Directors has authorized a share repurchase program of up to $200 million of the company’s common stock. According to InvestingPro data, this move aligns with management’s recent aggressive share buyback strategy.

The program will run through August 7, 2027, unless terminated or extended earlier by the Board. The medical technology company, which specializes in minimally invasive solutions for obstructive sleep apnea (OSA), will determine the timing, manner, price, and amount of any repurchases at its discretion. With a strong current ratio of 6.14 and more cash than debt on its balance sheet, the company appears well-positioned to execute this program.

Tim Herbert, Chairman and Chief Executive Officer of Inspire Medical, said the company recently initiated the full U.S. launch of Inspire V, its next-generation neurostimulation system, describing it as "the largest product launch in the history of our company."

According to the announcement, Inspire Medical will continue investing in marketing and expansion while returning capital to stockholders. The company stated it believes its stock is currently undervalued and represents an attractive investment opportunity.

Purchases may be conducted through open market transactions, privately negotiated transactions, or other means. The company is not obligated to repurchase any specific number of shares and may modify, suspend, or discontinue the program at any time.

Inspire Medical develops and commercializes neurostimulation technology for treating moderate to severe obstructive sleep apnea. Its proprietary Inspire therapy is approved by the FDA, EU MDR, and PDMA. The company has demonstrated solid performance with a 22% revenue growth in the last twelve months and maintains healthy gross profit margins of 84%. InvestingPro analysis indicates the stock may be undervalued at current levels, with 15+ additional ProTips and detailed financial metrics available for subscribers.

The company noted in its press release statement that it considered its historical and expected business performance, cash position, global economic conditions, and the market price of its common stock when determining the amount allocated to share repurchases.

In other recent news, Inspire Medical Systems reported second-quarter revenue of $217.1 million, surpassing Wall Street’s forecast of $214.3 million. Despite this revenue beat, the company experienced a GAAP earnings per share loss of $0.12, with an adjusted EPS of $0.45, which exceeded consensus expectations of a $0.20 loss. However, several analyst firms have adjusted their price targets for the company due to challenges with the Inspire V product rollout and other growth concerns. Jefferies reduced its price target to $160 while maintaining a Buy rating, citing slower progress on the Inspire 5 rollout. Piper Sandler also lowered its price target to $150, maintaining an Overweight rating amid Gen 5 launch issues. RBC Capital adjusted its target to $180, highlighting slower-than-expected growth for the Inspire V product. Stifel set its new target at $140, mentioning lagging Inspire V facility activations as a factor. Additionally, Truist Securities downgraded the stock from Buy to Hold, reducing its price target to $125 due to significant guidance cuts and anticipated second-half performance challenges.

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