Inspire Medical Systems, Inc. INSP delivered an earnings per share (EPS) of $1.15 in fourth-quarter 2024, up 134.7% from the year-ago period’s EPS of 49 cents. The metric surpassed the Zacks Consensus Estimate by 55.4%.

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Full-year 2024 EPS was $1.75, against the loss of 72 cents per share in the comparable 2023 period. The metric surpassed the Zacks Consensus Estimate by 31.6%.

INSP’s Revenues in Detail

Inspire Medical registered revenues of $239.7 million in the fourth quarter, up 24.5% year over year. The figure beat the Zacks Consensus Estimate by 0.04%.

Full-year 2024 revenues were $802.8 million, reflecting a 28.5% increase from the comparable 2023 period.

Shares of this company lost nearly 5.7% in yesterday’s after-hours trading.

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 $231.6 million reflected an increase of 22% from the year-ago quarter on a reported basis.

During the reported quarter, Inspire Medical activated 72 new U.S. centers, thus bringing the total to 1,435 U.S. medical centers providing Inspire therapy. The company also created 12 new U.S. sales territories in the quarter, bringing the total to 335 U.S. sales territories.

Revenues from outside the United States totaled $8.1 million, up 163% year over year on a reported basis.

INSP’s Margin Analysis

In the fourth quarter, Inspire Medical’s gross profit increased 23.9% to $203.7 million. However, the gross margin contracted 44 basis points (bps) to 84.9%.

Selling, general and administrative expenses jumped 14% year over year to $141.5 million. Research and development expenses decreased 2.3% year over year to $30.3 million. Operating expenses of $171.8 million increased 10.8% year over year.

Operating profit totaled $31.9 million, up 242.9% from the prior-year quarter’s level. The operating margin in the quarter expanded 847 bps to 13.3%.

Inspire Medical’s Financial Position

Inspire Medical exited 2024 with cash and cash equivalents and short-term investments of $445.5 million compared with $460.4 million at 2023-end.

Cumulative net cash provided by operating activities at the end of 2024 was $130.2 million compared with $24.7 million a year ago.

INSP’s Outlook

Inspire Medical has reiterated its revenue outlook and initiated the EPS guidance for 2025.

The company continues to project revenues in the range of $940 million-$955 million (representing growth of 17-19% from 2023 levels). The Zacks Consensus Estimate is pegged at $949 million.

The company expects its EPS for 2025 to be between $2.10 and $2.20. The Zacks Consensus Estimate is pegged at $2.03.

Our Take

Inspire Medical exited the fourth 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 activation of new U.S. centers and the creation of new U.S. sales territories during the reported quarter is encouraging. The expansion of the operating margin bodes well.

On the earnings call, Inspire Medical’s management stated that it had gained valuable experience with the Inspire V device with systems implanted in both Singapore and the United States, with positive early feedback. The company is currently continuing with its limited market release in the United States. Per management, the new Inspire SleepSync programming system has been fully launched in the United States, which aims to provide more efficient patient programming and improved access to patient data. These 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 Key Picks

INSP currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Cardinal Health, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.

Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently sports a Zacks Rank #1.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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