Wells Fargo has lowered its recommendation on Inspire Medical Systems (NYSE: INSP), moving the stock from Overweight to Equal Weight and cutting the price target to $70 from $145. The reduced target is close to Inspire's most recent share price of $68.21 and reflects lingering uncertainty around physician reimbursement that the firm expects will continue to weigh on the company.
Inspire's shares have experienced a steep decline over the past year, falling 63.5% and trading near a 52-week low of $64.46. The Wells Fargo valuation is anchored to a multiple of the firm's 2027 revenue estimate of $1.04 billion, with the new target representing roughly 1.6 times that 2027 revenue figure.
The analyst firm noted that the company's current valuation at approximately 1.6 times 2027 estimated revenue is materially lower than the median valuation of high-growth medical technology peers, which the firm places at about 6.3 times revenue, with a peer range of 5 to 8 times. That gap in multiples is central to the adjustment in Wells Fargo's view.
While Wells Fargo indicated that the availability of Inspire IV reduces the odds of significant downside to 2026 revenue, the analyst concluded that ongoing reimbursement uncertainty was the principal factor in the decision to downgrade the stock.
Market technicals were also noted in the update. Data cited in the report suggests INSP's relative strength index is inside oversold territory, a condition that can indicate that selling pressure has been heavy and may be nearing a limit.
Additional analysis referenced in the firm update indicated that the stock may be undervalued on certain metrics, and that further proprietary research resources exist to explore the company's fundamentals in greater detail.
Investors have also seen a separate shift in street sentiment. Despite Inspire Medical Systems reporting strong fourth-quarter 2025 financial results, Baird lowered its rating on the shares from Outperform to Neutral and cut its price target from $130.00 to $74.00. Inspire's reported fourth-quarter 2025 earnings per share reached $1.65, compared with a consensus forecast of $0.68, representing a positive surprise of 142.65%. Fourth-quarter revenue was $269.1 million versus an expected $263.81 million.
Baird's downgrade was explicitly linked to reimbursement challenges that prompted the firm to reduce its fiscal year 2026 outlook. The move by Baird mirrors the reimbursement-related concerns cited by Wells Fargo and underscores the tension between near-term clinical and commercial performance and persistent payment dynamics.
Overall, the recent analyst actions highlight a split between Inspire's operational performance in the quarter and the longer-duration uncertainty surrounding physician reimbursement. For market participants, the central questions remain the pace at which reimbursement clarity emerges and how quickly that clarity would affect revenue growth and relative valuation versus medtech peers.