Inspire Medical's INSP Plummets 37%: GLP-1 Rivals and Strategic Delays Trigger Investor Exodus

Summary
• Inspire Medical Systems (INSP) crashes 37.3% to $81.48, its lowest since 2022
• Earnings report reveals $217M revenue (+11% YoY) but slashes 2025 guidance to $900M–$910M
• Analysts cite GLP-1 drugs (Eli Lilly, Novo Nordisk) as existential threat to implantable sleep apnea devices
• Options volatility surges with 20 contracts trading at 38%–190% implied volatility

Today’s collapse in INSP reflects a perfect storm of competitive disruption and operational missteps. The stock’s 37.3% intraday drop—its worst since 2020—underscores investor panic over GLP-1 drug adoption and delayed Inspire V system rollout. With the 52-week low now at $73.92, the stock’s technicals and fundamentals align in a bearish narrative that demands immediate attention.

GLP-1 Drugs and Strategic Delays Fuel Investor Exodus
Inspire’s freefall stems from dual threats: GLP-1 drugs (Eli Lilly’s Zepbound, Novo Nordisk’s Wegovy) directly competing in sleep apnea treatment, and internal delays in transitioning to the Inspire V system. CEO Tim Herbert admitted the Inspire V rollout is 'slower than expected,' with Medicare billing only resuming in July. Meanwhile, Leerink analyst Mike Kratky slashed his price target to $116 from $149, citing 'underappreciated downside' from GLP-1 adoption. The stock’s 37.3% drop mirrors the 32% premarket plunge after earnings, as investors priced in both near-term execution risks and long-term market share erosion.

Medical Device Sector Steadies as INSP Crumbles
While INSP implodes, the broader medical device sector remains resilient. Sector leader Medtronic (MDT) trades down just 0.09%, reflecting confidence in diversified portfolios and stable demand for core devices. This divergence highlights INSP’s unique vulnerability to GLP-1 competition and product transition risks. Unlike MDT’s broad offerings in cardiac and surgical tech, Inspire’s niche focus on sleep apnea leaves it exposed to disruptive therapies like weight-loss drugs.

Bearish Options Play and ETF Positioning for INSP’s Freefall
• 200-day MA: $166.45 (far above current price)
• RSI: 53.24 (neutral but trending down)
• MACD: -1.34 (bearish divergence)
• Bollinger Bands: Price at 62% of upper band width

INSP’s technicals confirm a breakdown. The stock is trading 51% below its 200-day MA and within 1% of its 52-week low. With RSI neutralizing and MACD negative, the setup favors short-term bearish plays. The 200D support zone ($128.18–$129.99) is now a distant target, while the 30D support ($129.54–$129.84) has already been breached.

Top Options:
• INSP20250815P85
- Put option, strike $85, expires 2025-08-15
- IV: 109.30% (extreme volatility)
- Delta: -0.482 (moderate sensitivity)
- Theta: -0.107 (moderate time decay)
- Gamma: 0.02498 (low sensitivity to price swings)
- Turnover: $59,441 (high liquidity)
- LVR: 12.36% (moderate leverage)
- Payoff at 5% downside (ST=77.41): $7.59
- This put offers asymmetric upside in a 5% bearish scenario, leveraging extreme IV and moderate delta for a high-probability trade.

• INSP20250815C85
- Call option, strike $85, expires 2025-08-15
- IV: 61.41% (reasonable volatility)
- Delta: 0.485 (moderate sensitivity)
- Theta: -0.307 (high time decay)
- Gamma: 0.0445 (high sensitivity to price swings)
- Turnover: $127,350 (high liquidity)
- LVR: 26.27% (strong leverage)
- Payoff at 5% downside (ST=77.41): $0
- A high-gamma, high-LVR call for aggressive bulls betting on a rebound above $85, though time decay is steep.

Action: Aggressive bears should prioritize INSP20250815P85 for its IV-driven payoff potential. Watch for a breakdown below $73.92 (52-week low) to confirm a new bearish trend.

Backtest Inspire Medical Stock Performance
Inspire Medical Systems (INSP) experienced a significant intraday plunge of -37% on August 4, 2025, which was driven by a combination of factors including disappointing earnings guidance, increased competition from GLP-1 weight loss drugs, and operational delays. Despite this dramatic drop, the stock managed to recover and even surpassed previous levels:1. Intraday Plunge and Recovery: The -37% drop likely resulted in a shock, possibly due to a negative earnings report, guidance reduction, or unforeseen challenges in product transition. Despite this, the stock price recovered and ended the day with a lower, but positive percentage change.2. Post-Plunge Performance: Following the intraday plunge, INSP's stock exhibited resilience and rebounded. The stock's performance after the plunge suggests that investors may have reacted negatively to the short-term setbacks but were willing to revisit the stock as the market digested the news.

INSP’s Freefall: A Cautionary Tale for Niche Medtech
Inspire’s 37.3% collapse underscores the fragility of niche medtech plays in the face of disruptive therapies. With GLP-1 drugs now directly targeting sleep apnea and Inspire V delays compounding execution risks, the stock’s technical and fundamental outlook is bleak. Investors should monitor the $73.92 level for a potential new support and track Medtronic’s (MDT) -0.09% move as a barometer for sector sentiment. For INSP, the path forward hinges on resolving Inspire V rollout bottlenecks and mitigating GLP-1 headwinds—both of which remain unproven. Act now: Short INSP20250815P85 or consider a cash-secured short position below $75.