Jefferies has made an adjustment to the price target for Inspire Medical Systems (NYSE: NYSE:INSP), bringing it down to $230 from the previous target of $265, while continuing to recommend the stock as a Buy after the company outperformed consensus expectations with its preliminary second-quarter sales.
Inspire Medical reported preliminary sales for the second quarter of $195.9 million, marking a 30% year-over-year increase, surpassing the consensus estimate of $186.3 million by approximately 5%.
The strong sales performance was largely attributed to the company's U.S. market, which recorded sales of $187.8 million against the expected $180.3 million, noted an analyst from Jefferies.
The company's U.S. sales growth accelerated to 30%, with noted improvements in utilization. Following these results, Inspire Medical has increased its full-year 2024 sales guidance by $5 million, now projecting sales to range between $788 million and $798 million. This represents an anticipated growth of 26% to 28% year-over-year, aligning with the consensus estimate of $788 million.
Meanwhile, Inspire Medical recently announced the resignation of its Chief Operating Officer, Philip J. Ebeling, who will be taking up the role of President and CEO at a private cardiology-focused medical device company. As a result, Inspire Medical is set to engage a top executive search firm to find a suitable replacement.
The company has also recently got EU approval for its updated sleep apnea therapy. This approval allows patients in the EU to undergo full-body MRI scans and introduces silicone-insulated leads to the therapy.
InvestingPro Insights
Amidst the backdrop of Inspire Medical's encouraging preliminary sales results, key metrics from InvestingPro provide further context to the company's financial health and market performance. With a market capitalization of $3.88 billion and a notable revenue growth of 41.71% over the last twelve months as of Q1 2024, Inspire Medical appears to be on a strong growth trajectory. Additionally, the company's gross profit margin stands impressively at 84.65%, suggesting efficient cost management relative to its revenue.
However, investors should note that the stock has experienced significant volatility, reflected in a 48.36% price drop over the last three months. This aligns with one of the InvestingPro Tips, which highlights the stock’s substantial decline in the recent period. Despite the recent price fluctuations, analysts are optimistic, predicting profitability for the company within the year. This is a key consideration for potential investors, as the company's current Price / Book multiple is 6.6, indicating a valuation that anticipates future growth.
To gain a deeper understanding and access additional InvestingPro Tips, which currently lists 11 more insights for Inspire Medical Systems, visit https://www.investing.com/pro/INSP. For those interested in a subscription, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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