Truist Securities has adjusted the price target for Inspire Medical Systems (NYSE: NYSE:INSP), a company specializing in treatments for Obstructive Sleep Apnea (OSA), from $217 to $240, while reaffirming a Buy rating on the stock.
The change reflects an increased valuation multiple from 6.5x to 7.2x in enterprise value to sales (EV/Sales).
The adjustment followed the firm's participation in the recent ISSS & AAO-HNSF annual meetings, which took place from September 27 to October 1 in Miami.
The events focused on hypoglossal nerve stimulation (HNS), a key area for Inspire Medical Systems. The feedback and trial updates received at the conference were seen as neutral to marginally positive for Inspire Medical, according to the firm's analysis.
Truist Securities highlighted that the overall response from the conference did not lead to changes in their estimates for the company. However, the broader market's valuation expansion warranted an increase in the price target for the company's shares.
In other recent news, Inspire Medical Systems reported a significant increase in Q2 revenue, reaching $195.9 million, marking a 30% rise in U.S. revenue and a 27% growth in international markets.
The company's net income stood at $9.8 million, a notable recovery from the previous year's net loss. Full-year revenue guidance was also revised upwards to between $788 million and $798 million. Inspire Medical Systems received FDA clearance for the Inspire V neurostimulation system and EU MDR certification, and initiated a $150 million share repurchase program.
Lake Street Capital Markets maintained a Buy rating on Inspire Medical Systems, highlighting the company's consistent performance and growth. The firm reiterated a price target of $270, based on a 9x projected 2025 EV/Revenue multiple. Analysts suggest a positive outlook for the company's growth and regulatory approvals, although specific future guidance details are still in progress.
In other developments, Inspire Semiconductor Holdings Inc. extended the closing date of its ongoing non-brokered private placement, now expected to close by September 16, 2024, after successfully raising a total of C$414,584 in its initial tranche.
InvestingPro Insights
Inspire Medical Systems' strong market position in the OSA treatment space is further supported by recent InvestingPro data and tips. The company's revenue growth of 34.14% over the last twelve months as of Q2 2024 aligns with Truist Securities' positive outlook. This growth is complemented by a robust gross profit margin of 84.83%, indicating efficient operations and strong pricing power in the medical devices market.
InvestingPro Tips highlight that net income is expected to grow this year, and analysts predict the company will be profitable. This supports Truist Securities' confidence in maintaining a Buy rating. Additionally, the tip that seven analysts have revised their earnings upwards for the upcoming period suggests growing optimism about Inspire Medical's future performance.
The company's strong return over the last three months, as noted in another InvestingPro Tip, correlates with the positive sentiment expressed at the recent ISSS & AAO-HNSF annual meetings. This performance, coupled with the company's high return over the last decade, indicates a track record of delivering value to shareholders.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips that could provide deeper insights into Inspire Medical Systems' financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.