Shareholders of Inspire Medical Systems, Inc. (NYSE:INSP) will be pleased this week, given that the stock price is up 18% to US$60.09 following its latest second-quarter results. It was overall a positive result, with revenues beating expectations by 3.1% to hit US$201m. Inspire Medical Systems also reported a statutory profit of US$0.01, which was a nice improvement from the loss that the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus, from the 17 analysts covering Inspire Medical Systems, is for revenues of US$853.5m in 2026. This implies a perceptible 5.0% reduction in Inspire Medical Systems' revenue over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.014 per share in 2026. Before this earnings report, the analysts had been forecasting revenues of US$843.4m and earnings per share (EPS) of US$0.39 in 2026. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

Although the analysts are now forecasting higher losses, the average price target rose 17% to 51.42857, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Inspire Medical Systems, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$40.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 9.8% annualised decline to the end of 2026. That is a notable change from historical growth of 28% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Inspire Medical Systems is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Inspire Medical Systems to become unprofitable next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Inspire Medical Systems' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Inspire Medical Systems going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Inspire Medical Systems , and understanding this should be part of your investment process.

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.