What Happened?
Shares of medical technology company Inspire Medical Systems (NYSE:INSP) fell 3.4% in the afternoon session after Jefferies downgraded the stock to Hold from Buy and sharply reduced its price target to $85 from $160. The downgrade followed the firm's U.S. sleep survey, which pointed to ongoing headwinds from the uptake of GLP-1 weight loss medications and market share gains by competitors. The analyst also noted "muted expectations" for volume growth related to the company's Inspire 5 product line. Other contributing factors included concerns about physician reimbursement and what was described as a recent history of "execution challenges" at the medical device company.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Inspire Medical Systems? Access our full analysis report here.
What Is The Market Telling Us
Inspire Medical Systems’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 3.9% on the news that the company published promising clinical data for its next-generation Inspire V system designed to treat obstructive sleep apnea (OSA). The data, presented at medical meetings, came from a study in Singapore and a limited market release in the U.S. The results showed significant improvements, including a 20% reduction in surgical times compared to the previous model. Patient outcomes were also strong, with the Apnea Hypopnea Index, a key measure of sleep apnea severity, falling from 34.4 events per hour to 8.3. Additionally, patient adherence to the therapy was high, averaging over six hours per night. The U.S. study, which included 101 patients, reported no serious adverse events, confirming the system's safety.
Inspire Medical Systems is down 59.2% since the beginning of the year, and at $77.26 per share, it is trading 64.1% below its 52-week high of $215.42 from January 2025. Investors who bought $1,000 worth of Inspire Medical Systems’s shares 5 years ago would now be looking at an investment worth $615.71.
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