What Happened?

Shares of medical technology company Inspire Medical Systems (NYSE: INSP) jumped 3% in the afternoon session after RBC Capital significantly raised its price target on the stock. 

The firm adjusted its target to $175.00 from a previous $125.00, a 40% increase that signaled strong confidence in the company. Alongside the higher price target, RBC Capital analyst Shagun Singh maintained an 'Outperform' rating on the stock, reinforcing a positive outlook for the medical device maker.

After the initial pop the shares cooled down to $119.87, up 3.8% from previous close.

Is now the time to buy Inspire Medical Systems? Access our full analysis report here.

What Is The Market Telling Us

Inspire Medical Systems’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 2.3% on the news that the stock continued its positive momentum amid improved ratings from Wall Street analysts, as an increase in Medicare reimbursement rate boosted the growth outlook for the company's procedures. 

The stock roughly doubled since the end of October on the back of a good quarter. As a reminder, The Centers for Medicare & Medicaid Services (CMS) finalized a rule that is expected to increase the facility fee for INSP's sleep apnea procedure by approximately 50% (e.g., from about $30,000 to $45,000 per case at hospitals) starting in 2026. This significant boost, which affects an estimated 25-30% of their patient base, is viewed as a massive catalyst to drive higher procedure volumes and improve future profit margins. 

Overall, the move indicated that investors believe the sharp move down in the stock in August was an overreaction and that what plagued the company in that quarter could be temporary and short-lived.

Inspire Medical Systems is down 36.6% since the beginning of the year, and at $119.87 per share, it is trading 44.4% below its 52-week high of $215.42 from January 2025. Investors who bought $1,000 worth of Inspire Medical Systems’s shares 5 years ago would now be looking at an investment worth $631.80.

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