Inspire Medical Systems Inc. (NYSE: INSP) shares plunged 18.8% after the company cut its full-year outlook, overshadowing first-quarter results that beat analyst estimates on profit and revenue.
“Our first quarter results reflect revenue growth and improved adjusted operating income and cash flow,” said Tim Herbert, Chairman and CEO of Inspire Medical Systems. “We are continuing to work with key stakeholders to implement solutions that will resolve the coding and reimbursement uncertainty for Inspire V.”
The stock dropped to $44.50 in the immediate aftermath of the announcement. The company lowered its full-year revenue guidance to a midpoint of $850 million, a 12.8% decrease from its previous forecast, and slashed its adjusted EPS outlook by more than 50 percent to $1.00.
The sleep apnea device maker reported revenue of $204.6 million for the quarter ended March 2026, a 1.6% increase from the $201.32 million reported a year ago. The figure surpassed the Zacks Consensus Estimate by 2.94%. U.S. revenue, which constitutes the majority of sales, grew 1% to $195.6 million.
The company posted adjusted first-quarter earnings of $0.10 per share, beating the Zacks Consensus Estimate of a $0.36 loss by 127.62%. This compares to earnings of $0.10 per share in the same quarter a year ago.
Looking ahead, management said it expects the challenges caused by “coding and reimbursement uncertainty” to persist through the balance of 2026, leading to the significant reduction in its financial forecasts. The lowered guidance suggests slower procedure volume growth than previously anticipated. For the upcoming quarter, analysts project consensus EPS of $0.20 on $225.16 million in revenues.
The guidance cut marks a sharp reversal for a company that has surpassed consensus EPS and revenue estimates in the last four consecutive quarters. The stock has lost approximately 38.5% since the beginning of the year, underperforming the S&P 500’s 5.6% gain.
The lowered forecast implies a sharp deceleration from the company's historical growth. Over the last five years, Inspire Medical grew its sales at a 46.8% compounded annual rate, though this slowed to 17.7% over the last two years.
The stock currently has a Zacks Rank #4 (Sell), indicating it could underperform the broader market in the near term. Investors will be closely watching for a resolution to the reimbursement issues, which management has indicated will be a headwind for the remainder of the year.
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