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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3515
Positioning
Market Dominance
Manufacturing
Medical Equipment
$2.2B
Timothy P. Herbert
Inspire Medical Systems focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = INSP ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$INSP Inspire Medical Systems, Inc. | 40 | 66 | 52 | 12 | 61.2x | 54.6x | 3.6% | 3.1% | 84.7% | 2.3% | 3.3% | 14.6% | 0.0% | 16.0x | $2.2B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
Inspire Medical Systems, Inc. (INSP) receives a "Reduce" rating with a composite score of 40.2/100. It ranks #3515 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Timothy P. Herbert
Chief Executive Officer
Labor Force
760
66
30
40
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for INSP
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
High profitability & efficiency — strong quality floor supports entry
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for INSP.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
ROE proxy 3.6% (sector -2.5%)
GM 85% vs sector 43%, OM 2% vs sector 1%
Capital turnover N/A, R&D intensity 11.3%
Rev growth 15%, 8yr history
Interest coverage N/A, Net debt/EBITDA -1.7x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Inspire Medical Systems, Inc. receives a Reduce rating from our analysis, with a composite score of 40.2/100 and 2 out of 5 stars, ranking #3515 out of 7,333 stocks. INSP's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
INSP earns a quality score of 66/100, indicating above-average business quality. The company reports a return on equity of 3.6% (sector avg: -2.5%), gross margins of 84.7% (sector avg: 42.5%), net margins of 3.3% (sector avg: -0.2%). Companies in this tier generally demonstrate consistent profitability and efficient capital deployment, though they may face some competitive pressure.
INSP's value score of 52/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 61.16x, an EV/EBITDA of 54.62x, a P/B ratio of 2.18x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
Inspire Medical Systems, Inc.'s investment score of 30/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 14.6% vs. a sector average of 5.9% and a return on assets of 3.1% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
Inspire Medical Systems, Inc. is experiencing notably weak momentum with a score of just 12/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 14.6% year-over-year, while a beta of 1.16 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
INSP's stability score of 40/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.16 and a debt-to-equity ratio of 16.00x (sector avg: 0.2x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
The short interest score of 40/100 for INSP suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 16.00x). With a $2.2B market cap (mid-cap), Inspire Medical Systems, Inc. may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
Inspire Medical Systems, Inc. is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #3515 of 7,333 overall (52nd percentile). Key comparisons include ROE of 3.6% exceeding the -2.5% sector median and operating margins of 2.3% above the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While INSP currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Momentum (12) would have the largest impact on the composite score.
EV/EBITDA 377% ABOVE SECTOR MEDIAN
ROE 244% BELOW SECTOR MEDIAN
Gross Margin 99% ABOVE SECTOR MEDIAN (FAVORABLE)
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate Inspire Medical Systems, Inc. (INSP) as a Reduce with a composite score of 40.2/100 at a current price of $57.80. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in quality (66th percentile) and value (52th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (12th percentile) and investment (30th percentile) tempers our overall conviction. We assign a Narrow Moat rating (47/100), Medium uncertainty, and Standard capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
Inspire Medical Systems, Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 40.2/100 places it at rank #3515 in our full 7,333-stock universe. At $2.2B in market capitalization, Inspire Medical Systems, Inc. is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 15%, though momentum at the 12th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 85% (+42.2pp vs sector) narrow to operating margins of 2% (+1.0pp vs sector) and net margins of 3.3%, yielding a gross-to-net conversion rate of 4%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $57.80, Inspire Medical Systems, Inc. is trading near fair value based on current fundamentals. Our value factor score of 52/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 61.2x (a 175% premium to the sector median of 22.3x), EV/EBITDA of 54.6x (at a premium), P/B of 2.2x, P/S of 2.0x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.
Gross margins of 85% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Revenue growth of 15% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
A conservative balance sheet (16% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
The Reduce rating (composite 40.2/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
A P/E of 61.2x leaves little room for execution misses — any earnings disappointment could trigger a sharp multiple compression.
We assign a Medium uncertainty rating to Inspire Medical Systems, Inc.. The stock presents a balanced risk profile: below-average price stability (40th percentile) and elevated valuation multiple (P/E 61.2x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: below-average price stability (40th percentile); elevated valuation multiple (P/E 61.2x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 40th percentile and quality factor at the 66th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 85% provide a buffer against cost pressures; conservative leverage (16% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate Inspire Medical Systems, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 3.6%, and the balance sheet is managed within acceptable parameters (D/E: 16%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Inspire Medical Systems, Inc. falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, Inspire Medical Systems, Inc. receives a Reduce rating with a composite score of 40.2/100 (rank #3515 of 7,333). Our quantitative framework assigns a Narrow Moat (47/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 40/100.
Our analysis does not support a constructive view on Inspire Medical Systems, Inc. at this time. The combination of the current quantitative profile, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign Inspire Medical Systems, Inc. a Narrow Moat rating with a composite moat score of 47/100. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that Inspire Medical Systems, Inc. can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being margin superiority at 16.5/20.
The strongest moat sources are margin superiority (16.5/20) and growth durability (16.3/20). GM 85% vs sector 43%, OM 2% vs sector 1%. Rev growth 15%, 8yr history. These pillars form the core of Inspire Medical Systems, Inc.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (3.4/20) and reinvestment efficiency (4/20). ROE proxy 3.6% (sector -2.5%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect Inspire Medical Systems, Inc.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 85% providing a solid profitability foundation, moderate revenue growth of 15%. The margin cascade from 85% gross to 2% operating to 3.3% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 66th percentile.
The margin profile shows gross margins of 85%, operating margins of 2%, net margins of 3.3%. Return metrics include ROE of 3.6% and ROA of 3.1%. Relative to the Manufacturing sector, gross margins are 42.2 percentage points above the sector median of 43%, and ROE of 3.6% compares to a sector median of -2.5%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 16%, revenue growth of 15%. The sector median D/E is 0%, putting Inspire Medical Systems, Inc. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Weak momentum (12th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
Above 50MA
37.18%
Net New Highs
+51081
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