What Happened?

Shares of medical technology company Inspire Medical Systems (NYSE: INSP) jumped 5.3% in the morning session after the stock's positive momentum continued as Morgan Stanley raised its price target. Investors seemed to focus on the positive aspect of the analyst's note, which was the increased price target to $130 from $105. This suggested that despite the more neutral rating, the firm saw a higher potential valuation for the company's shares than it did before.

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 31 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 15.6% on the news that the stock's positive momentum continued as a significant increase in Medicare reimbursement rate boosted the growth outlook for the company's procedures, prompting multiple analyst upgrades. 

The regulatory change is expected to increase Medicare payments to hospitals for Inspire's procedures by approximately 50%, from around $30,000 to $45,000, creating a larger margin for the company. Following the news, several analysts viewed the company more favorably. For instance, Wolfe Research upgraded the stock from Peerperform to Outperform and set a price target of $180. Adding to the positive news, healthcare stocks continued to surge following a Politico report detailing a White House plan to propose a two-year extension of Obamacare subsidies. By extending these financial aids, the White House is essentially guaranteeing sustained, high enrollment in health plans. High enrollment translates directly into stable, predictable demand for the services provided by hospitals, drug manufacturers, and medical device companies.

Inspire Medical Systems is down 29.6% since the beginning of the year, and at $133.23 per share, it is trading 38.2% 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 $695.69.

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