Shares of Inspire Medical Systems fell sharply in after-hours trading after RBC Capital cut its price target on the company to $68.00 from $90.00 and maintained a Sector Perform rating. The stock traded around $68.21 and is hovering narrowly above its 52-week low of $64.46.
Market reaction and technical signals
The post-close decline equated to roughly a 9% move. Research data shows the shares are trading below assessed Fair Value and are technically oversold based on RSI readings.
Why RBC reduced the target
RBC’s revision follows Inspire Medical’s formal guidance for 2026, which calls for revenue growth of 4-10% year-over-year. That range sits below the company’s previously stated base-case expectation of 10-11% growth. Management attributed the lower guidance to coding headwinds tied to Inspire V.
RBC noted one element of clarity has emerged on coding - specifically the use of code 64582 with a 52 modifier - but emphasized remaining uncertainty around key commercial variables. The firm cited lingering questions on the magnitude of physician payment reductions and how those reductions could affect therapy adoption.
Inspire Medical provided a range for potential physician payment reductions, estimating they could fall anywhere from 10% to 50%. RBC highlighted that lower physician payments could reduce provider profitability and therefore slow adoption of the therapy.
Guidance dynamics and the path forward
The 2026 outlook assumes flat year-over-year growth in the first quarter followed by acceleration later in the year. RBC remarked that this acceleration still needs to be demonstrated, describing the 2026 revenue outlook as a moving target until volume trends and payment levels become clearer.
On a positive note, RBC acknowledged the company’s ability to manage expenses, a factor that mitigates some near-term risk. The firm nevertheless kept its Sector Perform rating given the unresolved questions around reimbursement and adoption.
Balance sheet and recent performance
Financial data indicate a strong liquidity position, with a current ratio reported at 5.29 and a capital structure showing more cash than debt. Those metrics suggest the company has financial flexibility while it works through the reimbursement environment.
Operationally, the company reported a robust fourth quarter of 2025. EPS came in at $1.65, notably above the $0.68 expectation, representing a 142.65% positive surprise. Revenue for the quarter was $269.1 million versus an expected $263.81 million.
Analyst moves and market outlook
Other brokerages have also revised their views amid reimbursement concerns. Piper Sandler cut its price target from $165.00 to $85.00 while retaining an Overweight rating. Wells Fargo downgraded the stock from Overweight to Equal Weight and set a $70.00 price target. Baird moved to Neutral with a $74.00 target. Each firm highlighted reimbursement uncertainty as a key factor constraining near-term visibility.
In sum, Inspire Medical’s recent earnings and balance-sheet strength provide offsetting positives, but coding and reimbursement uncertainty are weighing on sentiment and have prompted multiple price-target reductions and rating changes. The company’s guidance assumes a recovery later in 2026, but that trajectory remains to be proven.