Overview
Truist Securities has lowered its price target on Inspire Medical Systems (INSP) to $70.00 from $96.00 while keeping a Hold rating on the shares. The new target sits near the company's prevailing market price of $68.21, which itself is close to a 52-week low of $64.46. Over the past year the stock has declined by more than 63%.
Reimbursement and authorization concerns
In its note, Truist pointed to "less favorable" reimbursement outcomes that could reduce incentives for ear, nose, and throat specialists to perform the company’s I-5 procedure, beyond the initial coding confusion observed in the first quarter. The firm also flagged new prior authorization delays tied to the Centers for Medicare & Medicaid Services' WISeR program as an additional constraint on uptake.
The brokerage firm further highlighted potential pressure from growth in GLP-1 weight loss medications and the prospect of competing device trials, both of which it sees as risks to the company’s near-term adoption and procedure volumes.
Market reaction and valuation
Truist noted that shares were down roughly 5-8% on the update, and that the company is trading at about 1.5x enterprise value to sales on its revised outlook. The firm applied a reduced 1.5x EV/Sales multiple to its trimmed 2027 revenue projections, down from a previous 2x multiple. Truist said the change reflects uncertainty over the company’s near-term growth trajectory and a domestic slowdown tied to reimbursement frictions.
Operational buffer
Despite the downgrade in the valuation multiple, Truist acknowledged Inspire's strong unit economics, noting gross margins in excess of 80% and that the company is profitable. The firm suggested those factors offer some downside protection, but maintained the Hold rating and warned the stock "could be stuck for an extended period" while the company seeks a new code in 2028.
Recent financials and broader analyst response
Inspire reported fourth-quarter 2025 results that beat expectations, with earnings per share of $1.65 versus a forecast of $0.68, and revenue of $269.1 million compared with an anticipated $263.81 million. Even with those upside results, several other broker-dealers have adjusted their views on the shares.
- RBC Capital lowered its price target to $68.00 from $90.00, citing challenges related to Inspire V coding.
- Piper Sandler cut its target to $85.00 from $165.00 because of reimbursement uncertainty around the Gen 5 device, while maintaining an Overweight rating.
- Wells Fargo downgraded the stock from Overweight to Equal Weight and set a new target of $70.00, pointing to physician reimbursement concerns.
- Baird moved its rating from Outperform to Neutral and trimmed its target to $74.00 from $130.00, attributing the change to significant reimbursement challenges that affect the company’s growth outlook.
Technical note
Some technical indicators have shown extreme downside positioning: InvestingPro analysis referenced in the company research suggested the stock appears to be in oversold territory based on RSI readings. That technical insight was noted as one of several data points in the Pro Research Report covering INSP.
Bottom line
Truist’s move reduces the valuation multiple and trims the target to a level roughly in line with the market price, reflecting concern that reimbursement frictions and prior authorization delays could slow procedure adoption and revenue growth. While Inspire’s high gross margins and profitability present a financial buffer, the firm expects the company may remain range-bound until a new coding solution is obtained in 2028.
Key points and impacts are summarized below.