What happened?
Shares of medical technology company Inspire Medical Systems (NYSE: INSP) fell 8.2% in the afternoon session after the company reported a third-quarter net loss of $24.4 million and narrowed its full-year revenue guidance.
According to a company press release, Inspire Medical Systems reported that third-quarter revenue decreased 7.9% year on year to $206.7 million due to coding and reimbursement difficulties in the United States.
Diluted earnings per share was negative 84 cents. Operating expenses reached $206.6 million, which resulted in an operating loss of $28.7 million and an operating margin of negative 13.9%, down from 4.3% in the third quarter of the previous year. While revenue and adjusted earnings per share fell year on year, both figures were above analyst estimates of $204.5 million and 9 cents, respectively.
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What is the market telling us
Inspire Medical Systems’s shares are extremely volatile and have had 33 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 biggest move we wrote about over the last year was 11 months ago when the stock gained 28.6% on the news that the Centers for Medicare & Medicaid Services (CMS) finalized a rule significantly increasing payment rates for the company's sleep apnea procedures. Starting in 2026, hospitals and surgical centers will receive approximately $10,000 more per procedure compared to current rates. This regulatory win is a massive catalyst for Inspire because Medicare accounts for roughly 25-30% of its patient mix. The increased reimbursement provides a strong financial incentive for hospitals to prioritize these surgeries, which should drive higher procedure volumes.
Inspire Medical Systems is down 32.5% since the beginning of the year, and at $62.25 per share, it is trading 56.8% below its 52-week high of $143.99 from December 2025. Investors who bought $1,000 worth of Inspire Medical Systems’s shares 5 years ago would now be looking at only $231.45.
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