Last week, you might have seen that Inspire Medical Systems, Inc. (NYSE:INSP) released its full-year result to the market. The early response was not positive, with shares down 9.0% to US$59.76 in the past week. It looks like a credible result overall - although revenues of US$912m were what the analysts expected, Inspire Medical Systems surprised by delivering a (statutory) profit of US$4.89 per share, an impressive 401% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Inspire Medical Systems after the latest results.

Taking into account the latest results, the most recent consensus for Inspire Medical Systems from 16 analysts is for revenues of US$966.7m in 2026. If met, it would imply a credible 6.0% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plummet 66% to US$1.71 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.00b and earnings per share (EPS) of US$1.65 in 2026. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The analysts have cut their price target 33% to US$82.86per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. 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. The most optimistic Inspire Medical Systems analyst has a price target of US$180 per share, while the most pessimistic values it at US$66.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Inspire Medical Systems' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.0% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Inspire Medical Systems.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Inspire Medical Systems following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Inspire Medical Systems. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Inspire Medical Systems analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though.

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.