Inspire Medical Systems (NYSE: INSP) shares are taking a massive hit today despite first-quarter results that beat Wall Street’s expectations.
The day after the company’s after-market earnings release, shares of INSP were down more than 34% to $160.50 apiece. MassDevice’s MedTech 100 Index—which includes stocks of the world’s largest medical device companies—was down nearly 1%.
The hit may be attributed to BofA downgrading INSP from “Buy” to “Neutral,” according to Yahoo Finance. The firm cited strong revenue growth as a positive, but that growth has come in below trend for three straight quarters.
The Minneapolis-based developer of neuromodulation technology for treating sleep apnea reported losses of $10 million. That equals 65¢ per share on sales of $164 million for the quarter that ended March 31, 2024.
Inspire recorded a $5 million bottom-line gain on a 28.2% sales increase, ahead of the Wall Street consensus of $161.4 million in revenue.
Some of Inspire’s growth can likely be attributed to the massive CPAP recall at Philips. Philips, a leader in sleep apnea therapy, fell out of the market over the past few years. As a result, some moved away from that method of treatment, seeking alternatives like Inspire’s neuromodulation technology.
“We are pleased with our strong performance in the first quarter, growing revenue 28% year-over-year,” Tim Herbert, chair and CEO, said in a news release. “Our revenue growth was again driven by increased market penetration in existing centers, expansion into new territories, and increased physician and patient awareness of our Inspire therapy. Given our strong performance in the quarter and our improved outlook for the remainder of 2024, we are increasing our revenue guidance, and we now expect to be profitable for the full year 2024.”
Inspire previously projected between $775 million and $785 million. However, the company now projects sales to land between $783 million and $793 million, marking 25%-27% growth year-over-year.
This story originally ran on Tuesday, May 7. It was updated on Wednesday May 8 with next-day stock price.
