Inspire Medical Systems, Inc. INSP delivered an earnings per share (EPS) of 60 cents in third-quarter 2024 against the year-ago period’s loss of 29 cents per share. The metric surpassed the Zacks Consensus Estimate by a huge 900%.
INSP’s Revenues in Detail
Inspire Medical registered revenues of $203.2 million in the third quarter, up 32.5% year over year. The figure beat the Zacks Consensus Estimate by 2.8%.
Per management, the top-line growth was driven by increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system. However, this was partially offset by ENT surgeon capacity constraints.
Shares of this company gained nearly 3.3% in yesterday’s after-hours trading.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Inspire Medical’s Segment Details
Inspire Medical’s operations consist of two geographic regions — the United States and All other countries.
For the quarter under review, U.S. revenues of $195.8 million reflected an increase of 32.8% from the year-ago quarter on a reported basis. Per management, this upside reflects an increased market penetration in existing centers, expansion into new territories and centers and increased physician and patient awareness of the Inspire system.
During the reported quarter, Inspire Medical activated 66 new U.S. centers, thus bringing the total to 1,371 U.S. medical centers providing Inspire therapy. The company also created 13 new U.S. sales territories in the quarter, bringing the total to 323 U.S. sales territories.
Revenues from outside the United States totaled $7.4 million, up 27.2% year over year on a reported basis. This was primarily driven by an increased market penetration in existing centers, the expansion of INSP’s European sales representatives into new territories and centers, the start of reimbursed procedures in France and increased physician and patient awareness of the Inspire system.
Inspire Medical Systems, Inc. Price, Consensus and EPS Surprise
Inspire Medical Systems, Inc. Price, Consensus and EPS Surprise
Inspire Medical Systems, Inc. price-consensus-eps-surprise-chart | Inspire Medical Systems, Inc. Quote
INSP’s Margin Analysis
In the third quarter, Inspire Medical’s gross profit increased 32.5% to $170.8 million. However, the gross margin contracted 4 basis points to 84.1%.
Selling, general and administrative expenses jumped 15.1% to $130.4 million. Research and development expenses decreased 10.5% year over year to $26.1 million. Operating expenses of $156.5 million increased 9.9% year over year.
Operating profit totaled $14.3 million against the prior-year quarter’s operating loss of $13.5 million.
Inspire Medical’s Financial Position
Inspire Medical exited third-quarter 2024 with cash and cash equivalents and short-term investments of $410.9 million compared with $439.7 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $61.1 million compared with $7.4 million a year ago.
INSP’s Outlook
Inspire Medical has revised its outlook for 2024.
The company now projects revenues in the range of $793 million-$798 million (representing growth of 27-28% from 2023 levels), narrowed from the previous outlook of $788 million-$798 million (reflecting growth of 26-28% from 2023 levels). The Zacks Consensus Estimate is pegged at $796.1 million.
Inspire Medical reiterated its plans to open 52-56 new U.S. medical centers providing Inspire therapy and add 12-14 new U.S. sales territories during the fourth quarter of 2024.
The company now expects its EPS for 2024 to be between $1.20 and $1.40, up from the prior outlook of 60 cents-80 cents. The Zacks Consensus Estimate is pegged at 75 cents.
Our Take
Inspire Medical exited the third quarter of 2024 with better-than-expected results. The robust improvement of the top and bottom lines was impressive. Strength in year-over-year U.S. revenues and revenues from outside the United States was promising. The increased market penetration in existing centers and expansion into new territories and centers continue to aid INSP, which is encouraging.
The activation of new U.S. centers and the creation of new U.S. sales territories during the reported quarter also look encouraging. Management’s expectations of activating more U.S. medical centers and adding new U.S. sales territories during the fourth quarter of 2024 also raise our optimism about the stock.
On the earnings call, Inspire Medical’s management announced a recent peer-reviewed publication in the Journal of Clinical Sleep Medicine that reviewed the real-world experience with Inspire since the original FDA approval in 2014. Per management, the results showed significant improvements from the originally reported STAR trial, which is encouraging for the company’s business performance.
On the call, management also stated that INSP has begun the soft launch of its new SleepSync programming system, designed to increase the efficiency of Inspire patient management. The early feedback received is promising, and the company expects full U.S. availability this year. In August, Inspire Medical received the FDA’s approval for the Inspire V therapy system, which includes the next-generation neurostimulator and the associated Bluetooth patient remote and physician programmer. These also look promising for the stock.
However, the gross margin contracted due to rising product costs. This does not bode well for the stock.
Inspire Medical’s Zacks Rank and Other Key Picks
INSP currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Quest Diagnostics, carrying a Zacks Rank of 2, reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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