Inspire Medical Stock Is Down 38% This Year. Why It’s Surging Today.

Inspire Medical Systems, the maker of implants to treat sleep apnea, was upgraded to Buy from Hold at Stifel with a $110 price target, up from $100. (Dreamstime)

Key Points

• Inspire Medical Systems shares soar after a Stifel analyst upgrades the stock to Buy, citing a significant reimbursement revision.
• The company is set to receive a roughly 50% reimbursement increase for its Inspire V implant at hospitals and ambulatory surgical centers.
• Advertising spending increased 56% in the third quarter, a trend expected to continue, which drives awareness and procedures.

A small medical device maker caused a stir on Wall Street as its shares surged by double digits. In the words of one analyst, “pricing dynamics changed overnight.”

Inspire Medical Systems rose 28% to $115.20 on Monday, putting the stock on pace for its largest same-day percent increase since a nearly 32% jump in November 2020. The steep gains came after Stifel analyst Jonathan Block upgraded the stock to Buy from Hold and lifted his price target to $110 from $100.

A recent regulatory development also could be driving the gains. Block cited a “large positive reimbursement revision” the company received Friday evening, when the Centers for Medicare & Medicaid Services issued its annual update.

As a result, Inspire Medical will see a roughly 50% reimbursement increase at hospitals and ambulatory surgical centers, specifically as it relates to its Inspire V implant, which CEO Timothy Herbert once touted as “the largest launch in the history of the company.”

However, that isn’t the only catalyst. “In addition to the reimbursement news—and its accompanying pricing power—several other past concerns have been alleviated, and might act as tailwinds,” Block wrote.

He noted that estimates were “in a better place” following Inspire Medical’s admission that analysts’ expectations for 2026 were too high. Wall Street is currently looking for earnings of 96 cents a share on revenue of $905.2 million, according to FactSet.

Moreover, advertising spending is ramping after slowing in the first half of the year. The metric surged 56% in the third quarter alone, a trend that’s expected to continue. While it may sound like just another expense, the benefits justify the cost, Block wrote. “Our past work has shown that when Inspire spends it does help drive awareness and procedures,” he explained.

Counting Monday’s gains, Inspire Medical shares have dropped 38% in 2025. The benchmark S&P 500 , by comparison, has gained 14%.

Weight-loss drugs remain a risk to the company’s core business, seeing as Inspire Medical caters to patients with obstructive sleep apnea, a breathing disorder frequently linked to obesity.

Stifel’s conversations with doctors have indicated that patients who fail to see a benefit from CPAP machines are delaying Inspire therapy to try GLP-1 dugs, Block wrote. However, he believes this headwind is reflected in the company’s current valuation.

Despite the stock’s notable underperformance this year, attitudes on Wall Street skew positive. Of 18 analysts tracked by FactSet, 10 rate Inspire Medical at Buy or Overweight.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com