Inspire Medical Systems Stock Drop Looks Sharp, But How Deep Can It Go?
Inspire Medical Systems (INSP) stock is down 16.0% in a day. The recent slide reflects renewed concerns around the removal of a key billing code for sleep apnea therapy, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Inspire Medical Systems stands today.
- Size: Inspire Medical Systems is a $2.4 Bil company with $883 Mil in revenue currently trading at $80.81.
- Fundamentals: Last 12 month revenue growth of 16.8% and operating margin of 4.2%.
- Liquidity: Has Debt to Equity ratio of 0.01 and Cash to Assets ratio of 0.4
- Valuation: Inspire Medical Systems stock is currently trading at P/E multiple of 53.2 and P/EBIT multiple of 51.1
- Has returned (median) 11.7% within a year following sharp dips since 2010. See INSP Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside High valuation – making the stock Fairly Priced. For details, see Buy or Sell INSP Stock
That brings us to the key consideration for investors worried about this fall: how resilient is INSP stock if markets turn south? This is where our downturn resilience framework comes in. Suppose INSP stock falls another 20-30% to $57 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- INSP stock fell 61.6% from a high of $326.08 on 14 July 2023 to $125.26 on 13 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $251.19 on 2 May 2024 , and currently trades at $80.81
| INSP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -61.6% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- INSP stock fell 53.7% from a high of $89.92 on 2 March 2020 to $41.62 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 17 June 2020
| INSP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -53.7% | -33.9% |
| Time to Full Recovery | 86 days | 148 days |
2018 Correction
- INSP stock fell 35.0% from a high of $56.99 on 4 September 2018 to $37.07 on 7 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 8 February 2019
| INSP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -35.0% | -19.8% |
| Time to Full Recovery | 63 days | 120 days |
Feeling jittery about INSP stock? Consider portfolio approach.
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