Inspire Medical (INSP) Reports Solid Preliminary Q4 Revenues
Inspire Medical Systems, Inc. INSP recently announced preliminary revenues for fourth-quarter 2023. The robust preliminary results drove up the company’s shares by 0.1% in the after-hours trading session.
The company is scheduled to release fourth-quarter results on Feb 6.
Per the preliminary report, fourth-quarter 2023 total revenues are estimated to be between $192.3 million and $192.5 million, up 40% year over year. The Zacks Consensus Estimate of $177.4 million lies below the preliminary figure.
Inspire Medical activated 78 new centers in the United States in the fourth quarter of 2023, thereby bringing the total to 1,180 U.S. medical centers implanting Inspire therapy. The company also created 13 new sales territories in the United States in the to-be-reported quarter, thus bringing the total to 287 U.S. sales territories.
Per management, Inspire Medical demonstrated improved operating leverage throughout 2023 as its sales growth surpassed operating expenses. Thus, management anticipates announcing a profitable fourth quarter when it reports the full financial results. This raises our optimism about the stock.
Per the preliminary report, full-year 2023 total revenues are estimated to be between $624.6 million and $624.8 million, up 53% from the comparable 2022 period. The Zacks Consensus Estimate of $609.7 million lies below the preliminary figure.
Guidance
Inspire Medical has issued its full-year 2024 guidance.
Total revenues are expected to lie in the range of $775 million-$785 million, reflecting a 24-26% increase over the comparable 2023 period. The Zacks Consensus Estimate is pegged at $772.5 million.
A Brief Q4 Analysis
On the third-quarter earnings call in November 2023, Inspire Medical’s management confirmed that its international business witnessed strong growth. The company registered several wins, including growth in Germany and the first full quarter of leveraging country-wide reimbursement in Belgium.
However, management’s expectations that the company’s European revenues might be reduced by up to $4 million in the fourth quarter of 2023 due to the delay of the European Union Medical Device Regulation Approval (EU MDR) approval, and the shortage of polyurethane-based leads is likely to have weighed on Inspire Medical’s quarterly revenues.
On the same call, management had already confirmed that the company was running up against inventory supply issues of polyurethane-based leads. As Inspire Medical is yet to receive the EU MDR, which will allow it to ship the new silicone-based leads, it is currently pursuing a temporary pathway known as product derogation (a country-specific approval that allows for the early shipping of the silicone-based leads) to maintain product deliveries.
The company has already received derogation approval in the Netherlands and has begun the delivery of silicone-based leads. Management has also initiated the derogation process in other countries, including Germany, Belgium and Switzerland. This is likely to contribute to the quarterly revenues in the fourth quarter.
The company’s preliminary projection of robust improvement in revenues on the back of strength in its businesses lifts our confidence about the stock.
Price Performance
Shares of the company have gained 2.5% between Oct 1 and Dec 31, 2023, compared with the industry’s 13.3% rise and the S&P 500’s 10.9% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Inspire Medical carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Merit Medical Systems, Inc. MMSI and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has gained 10.8% compared with the industry’s 11.9% rise between Oct 1 and Dec 31, 2023.
Merit Medical, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 10.1% compared with the industry’s 2.1% rise between Oct 1 and Dec 31, 2023.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings has gained 26.3% compared with the industry’s 10.2% rise between Oct 1 and Dec 31, 2023.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DaVita Inc. (DVA) : Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
Inspire Medical Systems, Inc. (INSP) : Free Stock Analysis Report
