What Happened?

Shares of medical technology company Inspire Medical Systems (NYSE: INSP) jumped 16.2% in the morning session after the company reported strong third-quarter results that significantly surpassed Wall Street's expectations for both revenue and profit. 

For the quarter, Inspire Medical announced revenue of $224.5 million, up 10.5% year-on-year, topping analysts' forecasts. The company delivered a significant surprise on profitability, posting a GAAP profit of $0.34 per share, which was well above analyst estimates of a $0.19 per share loss. Management highlighted that growth was primarily driven by increased patient volume, positive clinical feedback, and continued expansion of the U.S. and international customer base. Bolstering investor confidence, the company reconfirmed its full-year revenue guidance of $905 million and provided full-year earnings guidance of $0.95 per share, also beating expectations. The strong report was a welcome sign for investors, suggesting a potential stabilization of the business after a weak second quarter.

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. But moves this big are rare even for Inspire Medical Systems and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 11 days ago when the stock dropped 3.4% on the news that 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.

Inspire Medical Systems is down 54.6% since the beginning of the year, and at $86.20 per share, it is trading 60% 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 $517.53.

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