BofA Securities has upgraded Inspire Medical Systems, Inc. (NYSE:INSP) and says the company now falls in the profitable growth category.
Inspire Medical is expected to give its 2025 revenue guidance in early January, likely alongside its fourth-quarter results.
The company has already stated that it is comfortable with the Street's consensus of $950 million in revenue for 2025.
For 2024, the company expects sales of $793 million – $798 million compared to prior guidance of $788 million – $798 million and a consensus of $796.09 million.
BofA has upgraded the stock from Neutral to Buy with a price target of $255, up from $220.
Inspire Medical's outlook for 2025 is based on plans to hire more staff, open new centers, increase direct-to-consumer advertising, expand treatment indications, and boost capacity.
Also Read: FDA Labels Inspire Medical's Sleep Apnea Nerve Stimulator Recall As Most Serious
The Inspire V system, expected to make a bigger impact in the second half of 2025 after the Inspire IV to V transition, could make the procedure easier and more accessible to more doctors, including general surgeons, ENTs, and neurosurgeons.
In August, the FDA approved the Inspire V therapy system, which includes the next-generation neurostimulator and the associated Bluetooth patient remote and physician programmer.
The company targets a soft launch in late 2024 and a full launch in 2025
One major advantage of Inspire V is that it simplifies the procedure by eliminating the need to place the sensing lead, which was a more complicated part of the process.
The analyst writes, "There are limited smid cap profitable growth stocks with a new product story in 2025 and INSP screens attractive as we look for top smid cap ideas in 2025. INSP seems on the path towards double digit margins which is when valuations tend to inflect and strategic interest increases."
Price Action: INSP stock is up 4.90% at $184.67 at last check Wednesday.
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