One-glance verdict
Undervalued
$111.35 our estimate vs market $74.92
Wall Street consensus: $60.73 (-45.5% lower than our fair-value estimate)
33% below our estimate, below the bear case
Fundamentals snapshot
Inspire Medical Systems, Inc.
INSP · NYQ · Healthcare · Medical Devices
Current price
$74.92
52-week range
$38.91 - $147.03
Market cap
$2.17B
Balance sheet
Healthy
371.93x Strong cushion
Net cash $291.59M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 18.0% on equity, ahead of 75% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Forward P/E (48.7x) is higher than trailing (16.5x) - earnings are expected to drop.
- Risk Insider ownership is only 1.2% (peer median: 2.9%).
What this company does
Inspire Medical Systems, Inc.
Inspire Medical Systems makes a small device that is implanted in the body to treat sleep apnea, a condition where people stop breathing in their sleep. The company's money comes from selling this nerve-stimulating system to hospitals as an alternative for patients who struggle with using traditional CPAP masks. Because many people find existing treatments difficult to use, Inspire is serving a large market of patients looking for a more comfortable solution.
How the company got here
Inspire Medical Systems was founded in 2007, spinning out of technology developed at a larger medical device company, Medtronic. A major turning point came in 2014 when its key product received approval from the U.S. Food and Drug Administration (FDA), which is the government body that ensures medical treatments are safe and effective. This approval allowed the company to begin selling its device in the United States, its largest market. The company has since focused on building awareness for its new treatment category and went public with an initial public offering (IPO) in 2018, selling its stock to the public to raise money for growth.
What it actually does
Inspire Medical Systems makes a small, implantable device to treat obstructive sleep apnea (OSA), a condition where a person's airway gets blocked repeatedly during sleep, causing them to stop breathing. This is an alternative for people who can't use or don't get help from the more common CPAP machine, which uses a mask and hose to push air into the airway. The Inspire device is placed under the skin in the chest during a short outpatient surgery. When the user turns it on with a remote before bed, the device sends a gentle pulse to a nerve that controls the tongue, moving it slightly forward to keep the airway open so the person can breathe normally all night.
Inspire Therapy System
The company's entire business is built around its single product, the Inspire therapy system. This system includes the small implanted device (called a neurostimulator), a patient remote control, and the tools that doctors use to program and adjust the therapy. Hospitals and surgery centers are the direct customers who purchase the system for the implant procedure. This single product line is responsible for nearly all of the company's revenue (the total money it brings in from sales). The company makes money by selling this complete system for each new patient.
What management is betting on now
Management's main focus is on getting more people to know about and use the Inspire therapy. A key part of their strategy is direct-to-consumer marketing (advertising directly to patients) to encourage people who have struggled with CPAP to ask their doctors about Inspire. They are also working to train more surgeons and get more hospitals to offer the procedure. Another priority is working with insurance companies to ensure the cost of the therapy is covered for patients, which makes it more accessible. Finally, the company continues to invest in research and development (the process of creating new and improved products) to enhance its technology and gather more clinical evidence of its benefits.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$44.28M
FY2024 Q4
$62.15M
FY2025 Q1
$-15.11M
FY2025 Q2
$-6.31M
FY2025 Q3
$58.09M
FY2025 Q4
$41.81M
FY2026 Q1
$3.12M
FY2026 Q2
$14.07M
Revenue
$200.58M
Net income
$314.00K
Diluted EPS
0.01
Operating cash flow
$23.23M
Free cash flow
$14.07M
Fetching…
Sources
Revenue
$204.58M
Net income
$-11.29M
Diluted EPS
-0.39
Operating cash flow
$12.85M
Free cash flow
$3.12M
Fetching…
Sources
Revenue
$269.08M
Net income
$136.09M
Diluted EPS
4.57
Operating cash flow
$52.47M
Free cash flow
$41.81M
Fetching…
Sources
Revenue
$224.50M
Net income
$9.93M
Diluted EPS
0.34
Operating cash flow
$68.53M
Free cash flow
$58.09M
Fetching…
Sources
Revenue
$217.09M
Net income
$-3.59M
Diluted EPS
-0.12
Operating cash flow
$2.68M
Free cash flow
$-6.31M
Fetching…
Sources
Revenue
$201.32M
Net income
$2.99M
Diluted EPS
0.10
Operating cash flow
$-6.70M
Free cash flow
$-15.11M
Fetching…
Sources
Revenue
$239.72M
Net income
$35.22M
Diluted EPS
1.17
Operating cash flow
$69.18M
Free cash flow
$62.15M
Fetching…
Sources
Revenue
$203.19M
Net income
$18.50M
Diluted EPS
0.60
Operating cash flow
$52.28M
Free cash flow
$44.28M
Fetching…
Sources
Is it cheap or expensive?
Fair value $111.35 vs current price $74.92
Wall Street consensus is the average analyst price target: $60.73 (-45.5% lower than our fair-value estimate).
Our most-likely fair value is $111.35 a share — about 48.6% above today's price of $74.92, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $291.6M - more cash than debt. Interest coverage 371.9x.
Net debt
$-291.59M
Interest coverage
371.93x
Inspire Medical Systems, Inc.'s profit covers its interest bill about 371.9 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
INSP
BASELINE
Inspire Medical Systems, Inc.
Total debt $29.09M Interest coverage 371.93x This is the baseline the peer rows are being compared against.
Total debt $727.35M Interest coverage -4.03x -100% vs INSP This peer has almost no interest-payment cushion compared with INSP.
Total debt $212.71M Interest coverage 144.35x -61% vs INSP Carries about 2.6x less debt cushion than INSP.
Total debt $104.45M Interest coverage -4.78x -100% vs INSP This peer has almost no interest-payment cushion compared with INSP.
What you should know
The case for and against INSP
3 Rewards
2 Risks
Rewards
-
Returns 18.0% on equity, ahead of 75% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 16.5x P/E vs peer median 78.6x (78.9% cheaper).
Risks
-
Forward P/E (48.7x) is higher than trailing (16.5x) - earnings are expected to drop.
-
Insider ownership is only 1.2% (peer median: 2.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
16.54x
Forward P/E
48.74x
P/B
2.62x
P/S
2.41x
EV/EBITDA
26.04x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
86.1%
Operating margin
-0.3%
Net margin
15.0%
ROE
18.0%
ROA
3.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
8.55x
Quick ratio
5.96x
Total debt
$29.09M
Total cash
$320.68M
Growth
How the business has been compounding
Revenue TTM
$898.74M
Revenue 5Y CAGR
40.6%
EPS TTM
4.53
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$157.07M
Free CF TTM
$78.48M
FCF margin
8.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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