Why Did Inspire Medical Systems Stock Plunge 25.59%?

Inspire Medical's stock price plummeted by 25.59% in pre-market trading on August 5, 2025, marking a significant downturn for the medical technology company.

JPMorgan downgraded Inspire Medical Systems from Overweight to Neutral, citing concerns over the company's revised guidance. The downgrade came after Inspire Medical reported mixed Q2 2025 financial results, with revenue growing 11% year-over-year to $217.1 million, but missing analysts' earnings per share (EPS) estimates by a significant margin.

The company's full-year revenue guidance was reduced to $905 million at the midpoint, a 4.5% decrease from previous estimates. This revision was attributed to the slower-than-expected U.S. commercial launch of the Inspire V system and the delayed transition timeline, which is expected to impact financial results for the year. Additionally, the company's EPS guidance for the full year was set at $0.45 at the midpoint, missing analyst estimates by 80.1%.

Despite a strong quarter with a 20.3% adjusted EBITDA margin and a 10.8% year-on-year revenue growth, the stock prices dropped by 16.89% following the revised revenue guidance. The company's operating margin also declined to -1.5% from 2.6% in the same quarter last year, reflecting the challenges faced in the current market conditions.