Inspire Medical Systems (INSP) Q4 Margin Surge To 15.9% Tests Cautious Earnings Narratives

Inspire Medical Systems (INSP) has wrapped up FY 2025 with Q4 revenue of US$269.1 million and basic EPS of US$4.70, alongside net income of US$136.1 million. Its trailing 12 month figures show revenue of US$912.0 million and basic EPS of US$4.95. The company has seen revenue move from US$802.8 million to US$912.0 million on a trailing 12 month basis, with basic EPS shifting from US$1.80 to US$4.95 over the same period. This sets the stage for investors to focus on how much of that growth is coming from stronger margins.

See our full analysis for Inspire Medical Systems.

With the headline numbers on the table, the next step is to see how this margin story lines up with the widely held narratives around Inspire Medical Systems and where those narratives might need a rethink.

See what the community is saying about Inspire Medical Systems

Margins Step Up With 15.9% Net Margin

• Over the last 12 months, Inspire Medical Systems generated trailing net income of US$145.4 million on US$912.0 million of revenue, which works out to a 15.9% net margin compared with 6.7% in the prior year period.
• Consensus narrative leans on margin gains supporting future growth, and the current figures partly back that up but also set a high bar:
  • Analysts in the balanced view expect margins to move from 6.2% to 8.0% over the next 3 years, while the trailing 15.9% margin already sits well above that assumption, so any normalization from here would look softer than the recent run rate.
  • At the same time, 171.8% trailing earnings growth and a 64.6% 5 year annualized profit growth history give that consensus some support, because they show the business can deliver materially higher profit levels when conditions line up.

Valuation Gap Versus 11.9x P/E

• With a share price of US$59.65 and trailing EPS of US$4.95, the implied P/E is 11.9x, which compares with a DCF fair value of about US$74.88 and higher peer and industry P/Es of 38.8x and 30.8x.
• Bulls argue that this discount leaves room for upside, and the data gives them some support but also highlights what needs to go right:
  • Bullish analysts in the optimistic view are looking for earnings to reach US$157.1 million and EPS of US$5.20 by around 2028, a smaller step up from the current trailing US$145.4 million and US$4.95 than it might first appear, so a lot of the bullish story relies on keeping margins near recent levels.
  • That same bullish camp expects the company to trade on a high P/E multiple in future, while today’s 11.9x is well below both their assumed future multiple and current peer levels, which is where the argument about a valuation gap really comes from.

If you want to see how bullish investors connect these numbers to their long term thesis, take a look at the 🐂 Inspire Medical Systems Bull Case for Inspire Medical Systems.

Q4 Swing Highlights Bear Concerns

• Quarter by quarter, FY 2025 shows a wide spread in results, with Q4 revenue of US$269.1 million and net income of US$136.1 million versus Q2 revenue of US$217.1 million and a net loss of US$3.6 million.
• Bears point to this lumpier pattern and the forward data as signs that growth may not be smooth, and the available numbers echo parts of that concern:
  • The risk and reward summary shows analysts modeling a 0.9% annual earnings decline over the next 3 years and revenue growth of 8.7% per year, below the wider US market at 10.4%, which lines up with the cautious narrative about slower growth than some medtech peers.
  • Short term share price moves have also been described as more volatile than the US market, and when you set that against swings from a quarterly loss in Q2 2025 to strong profit in Q4, you can see why skeptics focus on execution and timing risk rather than only the trailing margin headline.

Skeptical investors are watching that Q4 swing closely, so if you want the full cautious angle, check out the 🐻 Inspire Medical Systems Bear Case for Inspire Medical Systems.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Inspire Medical Systems on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers differently? If this data points you in another direction, shape that view into your own narrative in minutes with Do it your way.

A great starting point for your Inspire Medical Systems research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Explore Alternatives

Inspire Medical Systems’ story includes uneven quarterly earnings, cautious analyst forecasts for a 0.9% annual earnings decline, and share price moves described as more volatile than the US market.

If that mix of lumpier results and higher share price swings has you wanting something steadier, check out our 85 resilient stocks with low risk scores built to highlight companies with more resilient profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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