iRhythm Holdings (IRTC) just raised its full year 2026 revenue and profitability guidance after reporting first quarter sales of US$199.39 million and a narrower net loss, putting fresh focus on the stock.

Even with the raised full year outlook, the stock has been under pressure, with a 90 day share price return of 22.43% and a year to date share price return of 31.06%, while the 5 year total shareholder return of 51% shows a very different picture over a longer timeframe.

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With iRhythm now guiding to US$875 million to US$885 million in 2026 revenue and the shares about 31% lower year to date, are you looking at an undervalued growth story, or at a market that is already pricing in what comes next?

Most Popular Narrative: 38.1% Undervalued

At a last close of $120.80 versus a narrative fair value of $195.00, the current price sits well below what this widely followed view implies, putting the focus squarely on whether the growth and margin story can bridge that gap.

Expansion into international markets (UK, EU, Japan), where iRhythm is seeing strong early uptake and building clinical validation, diversifies revenue streams and positions the company for long-term topline growth as aging populations drive global demand for remote cardiac monitoring.

Read the complete narrative. Read the complete narrative.

Curious what kind of revenue ramp, margin lift, and earnings power need to line up for that $195.00 fair value to stack up? The narrative leans on a fast climb from losses to profitability, paired with a rich future earnings multiple more commonly associated with high growth names. Want to see the exact growth runway and profit profile that bridge today’s $120.80 price to that higher target? The full story is in how those assumptions work together over the next few years.

Result: Fair Value of $195.00 (UNDERVALUED)

However, that upside story depends on DOJ related overhangs, reimbursement pressure, and competitive threats not eroding the growth, margin, and premium P/E assumptions built into this narrative.

Another Lens on Valuation: Rich Sales Multiple

The narrative fair value of $195.00 paints iRhythm as undervalued, but the current P/S of 5x tells a different story. That is well above both the US Medical Equipment industry at 2.8x and the fair ratio of 3.9x, which points to valuation risk if sentiment cools or growth expectations reset.

For a closer look at what the numbers imply about that gap, and how far the P/S might move toward the fair ratio in different scenarios, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals on value and risk, it makes sense to check the underlying data for yourself and decide quickly where you stand on iRhythm. To weigh up both sides of the story in one place, start with 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.