Truist Securities announced a revision to its investment stance on Inspire Medical Systems, shifting its rating from Buy to Hold and reducing its price target to $96.00 from the previous $120. Currently, Inspire Medical's stock trades at around $82.86, below this adjusted target. Data from InvestingPro highlights that despite recent hurdles, the company sustains a robust financial health rating of 3.26, categorized as "GREAT," and holds a net cash position, where cash balances exceed outstanding debt.
This adjustment in rating results from a significant complication concerning medical coding for Inspire Medical's products. The company has lost the ability to officially use the CPT code 64568, which had been recommended by the Centers for Medicare & Medicaid Services (CMS) for reimbursement purposes. Truist's earlier bullish call in late November hinged on anticipated benefits derived from an upgrade in the CMS coding framework, predicting improved pricing power. Those expectations have now been invalidated as the coding upgrade is no longer considered viable.
Starting mid-December, Medicare Administrative Contractors (MACs) initiated the removal of code 64568 despite CMS's initial directive endorsing its use. Subsequently, CMS declared the code unusable for billing, creating uncertainty around reimbursement pathways. As a countermeasure, Inspire Medical may revert to utilizing the older I-IV code (64582). This transition could incorporate unspecified adjustments based on MACs' discretion; however, details of such modifications remain unclear at present.
Despite these coding setbacks, financial indicators suggest that Inspire Medical remains operationally sound. InvestingPro data confirms the company is profitable with strong liquidity metrics, including liquid assets surpassing its short-term liabilities.
Additional developments in the sector reflect ongoing regulatory and market shifts. CMS's removal of obstructive sleep apnea (OSA) as a covered diagnosis under code 64568 now places coverage decisions in the hands of individual MACs. This policy change impacts claims processing and reimbursement rates. In light of this, Oppenheimer downgraded Inspire Medical from Outperform to Perform amid increased uncertainty.
Conversely, Jefferies raised its price target for Inspire Medical to $100, citing solid preliminary results from the fourth quarter, including estimated sales near $269 million. This figure indicates a 12% increase year-over-year and exceeds analysts' consensus forecast of $262 million, reflecting underlying market demand and company execution.
In company leadership news, Richard J. Buchholz, formerly Inspire Medical's Chief Financial Officer, has accepted the CFO role at Impulse Dynamics, effective March 2, 2026. Buchholz was instrumental in guiding Inspire Medical through its 2018 IPO and achieving full-year profitability in 2024. Under his stewardship, Inspire's revenue surged from $3.8 million in 2014 to more than $910 million in 2025, demonstrating remarkable growth.
These collective updates underscore dynamic regulatory, operational, and leadership factors influencing Inspire Medical Systems and suggest evolving market conditions within the medical device and healthcare sectors.