Inspire Medical Systems (INSP) faces risks to estimates and the stock is unlikely to perform without consistent clarity on coding pathways for centers, BofA Securities said in a Friday research note.
The company's guidance assumes 2027 revenue will grow but it is difficult to predict a sustainable improvement until there is an official Category 1 code for the Inspire V leadless hypoglossal nerve stimulation system.
The brokerage lowered its 2027 EPS estimate to $1 from $1.15 and its revenue forecast to $854 million from $863 million earlier. The EPS estimate for 2028 was trimmed down to $1.28 from $1.35 and the revenue forecast was cut to $907 million from $917 million.
The company witnessed a decline in prior authorization submissions in Q1, but sees Q2 as the trough in growth, given early signs of PA volumes stabilizing and improving as centers gain coding experience, according to the note.
BofA downgraded the stock to underperform from neutral and cut its price target to $39 per share from $53.
Shares of Inspire Medical were down nearly 4% in Friday trading.
Price: $43.07, Change: $-1.67, Percent Change: -3.73%