MeritValue

Inspire Medical Systems, Inc.

INSPdata completeness 88%10 fiscal years on file
The thesis, from the filings

Inspire Medical Systems, Inc. earns about -25% on invested capital, below its ~9% cost of capital, but has diluted owners by 9% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $50.32 and $54.29 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$233.4M1$407.9M2$624.8M3$802.8M3$912M3
Net income−$42M4−$44.9M5−$21.2M6$53.5M6$145.4M6
Operating cash flow−$20.1M7$11.6M8$24.7M9$130.2M9$117M9
Capital expenditure$4.67M10$9.1M11$23.6M12$39.1M12$38.5M12
Free cash flow (derived)−$24.8M7$2.47M8$1.02M9$91.1M9$78.5M9
Total debt$24.5M13————
Cash & equivalents$214.5M14$441.6M15$185.5M16$150.2M17$104.8M17
Diluted shares27.3M28.1M29.3M30.5M29.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$262.51
your share of equity
Profit it earned you last year
$48.87
Free cash flow it threw off
$26.37
Debt you’d be carrying
—

10 shares is a claim on $262.51 of net worth that earned you $48.87 and generated $26.37 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-25% avg · 5y
FY21 -81%FY22 -62%FY23 -4%FY24 10%FY25 10%

It earned about -25% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+9% shares · 5y

Share count is up 9% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $50.32 and $54.29 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$54.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$78.5M
DCF · Growth Exit 5Y
$50.32
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$78.5M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$53.74
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $50.32
The three cases
Bear0.0%$41.2
Base5.0%$50.32
Bull10.0%$61.24

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001609550-24-000016 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001609550-25-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001609550-26-000016 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001609550-24-000016 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001609550-25-000011 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001609550-26-000016 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001609550-24-000016 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001609550-25-000011 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001609550-26-000016 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001609550-24-000016 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001609550-25-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001609550-26-000016 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001609550-22-000014 (LongTermDebt)
  14. 10-K · period ending 2021-12-31 · accession 0001609550-23-000024 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0001609550-24-000016 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0001609550-25-000011 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001609550-26-000016 (CashAndCashEquivalentsAtCarryingValue)