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Shareholders might have noticed that Inspire Medical Systems, Inc. (NYSE:INSP) filed its yearly result this time last week. The early response was not positive, with shares down 2.6% to US$187 in the past week. Revenues were US$803m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.75, an impressive 32% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Inspire Medical Systems
After the latest results, the 17 analysts covering Inspire Medical Systems are now predicting revenues of US$949.1m in 2025. If met, this would reflect a solid 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 20% to US$2.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$948.7m and earnings per share (EPS) of US$1.90 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.
The consensus price target was unchanged at US$233, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Inspire Medical Systems analyst has a price target of US$270 per share, while the most pessimistic values it at US$190. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Inspire Medical Systems' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.9% per year. So it's pretty clear that, while Inspire Medical Systems' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.