Sleep may get interrupted for reasons other than a disruption to the circadian rhythm. Growth stock Inspire Medical Systems focuses on treating sleep disorders and is today's selection for IBD 50 Stocks To Watch.
Shares are building a cup base with a buy point at 282.41. The stock also rebounded from the 50-day moving average in strong volume within the base.
Inspire has an impressive Composite Rating of 92 and a Relative Strength Rating of 93. However, the fundamentals have been uneven, according to IBD MarketSmith.
Sales have grown over the past seven quarters but earnings have been sparse. Sales grew 76% to $137.9 million in the fourth quarter, while earnings per share were 10 cents. The company has yet to have a profitable year.
Analysts polled by FactSet expect sales of $120.1 million in the first quarter and a loss of 66 cents per share for the growth stock. They also expect more losses this year and next.
In the fourth quarter, Inspire added 61 centers in the U.S., bringing the total U.S. centers to 905. It also added 16 new sales territories in the U.S. The company expects sales of $560 million to $570 million for the full year, which would be an increase of 37% to 40%. FactSet's poll of analysts sees sales in the higher end of the range, at $569.4 million, with a loss per share of $1.26 for the full 2023.
Growth Stock IPO Was A Success
INSP went public in May 2018. The stock popped on the first day of its listing on the NYSE, at an initial offering of $16 per share. The stock skyrocketed and today is trading near the all-time high 286.29 ahead of earnings on May 2.
The medical technology company makes and sells a device inserted in patients through surgery to manage obstructive sleep apnea by stimulating nerves to maintain open airways.
Obstructive sleep apnea is a potential serious health condition that can lead to a wide range of diseases such as high blood pressure, diabetes and stroke. The FDA gave its approval for the use of Inspire in 2014. The minimally invasive technology became an alternative to other treatments that pump air into the lungs during regular breathing.
Inspire sells to hospitals and surgery centers in the U.S. and through distributors in Europe, Japan and Singapore.
FDA Approves Expanded Use
In March, the Golden Valley, Minn.-based company got FDA approval for the use of its Inspire system for pediatric patients with Down syndrome. Previously, Inspire was available only for adults with Down syndrome.
Over 24,000 patients have undergone treatment using Inspire at over 820 medical centers in the U.S. and Europe.
The growth stock is in the medical products group, which holds a lofty No. 7 place among IBD's 197 industry groups.
Mutual funds own 72% of the growth stock. Strong institutional interest is also evident in the stock's Accumulation/Distribution Rating of B.
Exchange traded funds also hold shares of Inspire. The iShares Russell 2000 ETF and the Vanguard Small Cap ETF own shares.
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