Inspire Medical Navigates Growth Reset Amid GLP-1 and Reimbursement Dynamics

What happened

Inspire Medical Systems has experienced a significant growth deceleration in 2025, with revenue guidance cut to 12-13% from prior highs due to GLP-1 therapy competition and a slower-than-expected Inspire V device rollout, leading to a 51.5% stock decline over the past year. Management has stabilized expectations by reaffirming this reset guidance and raising EPS targets through cost discipline, while progressing the Inspire V transition which offers shorter procedures and improved clinical outcomes. A critical tailwind is the 2026 Medicare reimbursement step-up, expected to boost facility fees by roughly 50%, potentially enhancing procedure economics and volume growth if executed effectively. The recent Zacks article advocates retaining the stock, emphasizing a balance between near-term pressures and long-term opportunities, but this view may understate persistent GLP-1 and regulatory risks highlighted in deeper filings. Market sentiment has shifted from bearish to more neutral, with the stock trading at a derated valuation of ~55x TTM EPS that embeds ongoing challenges but leaves room for recovery if operational milestones are met.

Implication

The investment case centers on whether Inspire can sustain double-digit revenue growth and mid-80s gross margins despite GLP-1 competition, which requires close monitoring of procedure volumes and payer behavior. Near-term catalysts include the 2026 Medicare reimbursement boost and continued Inspire V adoption, with success potentially driving normalized EPS above $2 by 2026 and supporting a base-case valuation around $120. Downside risks are substantial, including further volume erosion from GLP-1 therapies, regulatory scrutiny from the DOJ investigation, and execution missteps that could compress margins and push the stock toward the bear-case $70. Upside potential exists if Inspire effectively captures reimbursement economics, expands internationally, and mitigates GLP-1 cannibalization through direct-to-consumer marketing and clinical evidence. Given the high valuation multiples and single-product concentration, position sizing should be modest, with investors prepared to exit if guidance weakens or key risk boundaries are breached.

Thesis delta

The core thesis remains unchanged: INSP is a derated, high-margin growth story with a path to mid-teens revenue expansion if Inspire V adoption and reimbursement tailwinds materialize, balanced against GLP-1 and regulatory risks. The new article adds no substantive shift, merely echoing the sentiment that near-term pressures are manageable, but it fails to critically address the deeper execution and competitive threats documented in filings. Investors should prioritize the detailed analysis from SEC reports over superficial recommendations, as the stock's fate hinges on tangible operational progress in the next 6-12 months.