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Inspire Medical Systems, Inc. (NYSE:INSP): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Inspire Medical Systems, Inc.'s (NYSE:INSP) future prospects. Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally. The US$7.2b market-cap company announced a latest loss of US$45m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Inspire Medical Systems will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Inspire Medical Systems

Consensus from 10 of the American Medical Equipment analysts is that Inspire Medical Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$19m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Inspire Medical Systems given that this is a high-level summary, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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One thing we’d like to point out is that Inspire Medical Systems has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Inspire Medical Systems, so if you are interested in understanding the company at a deeper level, take a look at Inspire Medical Systems' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

  1. Valuation: What is Inspire Medical Systems worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Inspire Medical Systems is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Inspire Medical Systems’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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