Summary
Wolfe Research downgraded Inspire Medical Systems (NYSE:INSP) from Outperform to Peerperform, saying it had "completely missed" its earlier call. The move accompanies a steep 68.13% decline in the company's share price over the past year. Wolfe pointed to lower conviction in the company’s reduced guidance amid waning physician incentives, and flagged several external headwinds including GLP-1 medications and competition from NYXH, LIVN and Apnimed. InvestingPro data noted the stock appears undervalued with an RSI in oversold territory, yet it trades at an elevated EBITDA multiple of 20.6x. Despite those concerns, Inspire retains a "GREAT" overall financial health score, with more cash than debt.
Wolfe Research rationale
Wolfe Research described its prior recommendation as a "swing" that proved incorrect and expressed frustration both at its own analysis and at the Centers for Medicare & Medicaid Services (CMS). The firm acknowledged it had overestimated the outlook, and now finds it difficult to place conviction behind Inspire’s lowered guidance in light of decreased physician incentives.
While Wolfe noted valuation metrics that could suggest the shares are inexpensive - a reported oversold RSI and InvestingPro’s undervaluation indication - analysts balanced that against a high reported EBITDA multiple of 20.6x and uncertain demand dynamics tied to physician behavior.
Competitive and clinical headwinds
The research note specifically called out several competitive and market pressures that could complicate growth. Wolfe listed GLP-1 medications, the competitive presence of NYXH and LIVN, and Apnimed as potential headwinds for Inspire’s business. Those pressures were cited alongside reimbursement and coding concerns as factors weighing on forward guidance.
Financial health and operational context
Even as analysts pressed on valuation and demand questions, Inspire was reported to hold a strong balance sheet position under the metrics cited by Wolfe, with more cash than debt and a "GREAT" overall financial health score. The company’s fourth-quarter revenue was said to be in line with prior announcements, and adjusted earnings per share beat at $1.65.
Recent analyst moves and price-target changes
The downgrade by Wolfe is one of several recent analyst actions tied to reimbursement uncertainty and regulatory questions. Piper Sandler cut its price target to $85.00 from $165.00 while keeping an Overweight rating, pointing to reimbursement uncertainty especially around the company’s Gen 5 device. Wells Fargo moved to downgrade Inspire from Overweight to Equal Weight and trimmed its price target to $70.00, citing persistent reimbursement issues. Truist Securities reduced its price target to $70.00 from $96.00 and kept a Hold rating, highlighting new prior authorization delays tied to CMS’s WISeR program. Stifel lowered its target to $95.00 from $110.00 but maintained a Buy rating, attributing the adjustment to ongoing reimbursement challenges. RBC Capital cut its price target to $68.00 from $90.00 after Inspire revised its 2026 guidance to 4-10% year-over-year growth - a range stated to be below the prior base case of 10-11% and attributed to coding headwinds.
Implications
Taken together, the analyst downgrades and price-target reductions underscore investor and analyst concern around reimbursement and regulatory dynamics that intersect with competitive developments and shifts in physician incentives. Those factors are central to the near-term outlook that has driven multiple firms to reassess valuation and ratings.
Key takeaways
- Wolfe Research downgraded Inspire from Outperform to Peerperform after a self-described "complete miss" and reduced conviction in lowered guidance.
- Shares have declined 68.13% over the past year; InvestingPro signals undervaluation with an oversold RSI, but the stock trades at a 20.6x EBITDA multiple.
- Several firms cut price targets and adjusted ratings amid reimbursement uncertainty, coding headwinds and operational guidance reductions.
Risks and uncertainties
- Reimbursement uncertainty and regulatory processes - including prior authorization delays tied to CMS’s WISeR program - that could affect revenue realization for the company and the broader medical device sector.
- Competitive pressure and changing clinical dynamics - including potential effects from GLP-1 medications and competitors NYXH, LIVN and Apnimed - which may influence procedure volumes and demand for Inspire’s therapy.
- Operational and coding headwinds reflected in revised 2026 guidance (4-10% year-over-year growth) that are below the company’s previous base case (10-11%).
This article reports on analyst ratings, price-target changes and company disclosures as stated above.