Forensic Analysis · Healthcare / Pharmaceuticals / Biotech · as of Aug 11, 2026
Inspire Medical Systems, Inc. (INSP)
A forensic read on Inspire Medical Systems, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Safe
Financial health
16.0
Distress distance
Watch
Earnings quality
6
Forensic signals
12.9
P / E (ttm)
18.6%
ROE
$1.7B
Market cap
13.6%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Inspire Medical Systems, Inc. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 16.0, placing it in the Safe zone. 6 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of noa).
What the filings flag
+22.5%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +22.5% relative to their own average in FY2025 — scaled by NOA itself, not total assets (see the Forensic Screens card's differently-scaled Sloan Accrual Ratio for that read). Accruals are building sharply — a large slice of profit sits in operating assets, not cash; Richardson/Sloan link high accruals to weaker future returns as they reverse. The build is led by inventory up +81% against +8% in cost of sales and receivables up +29% against revenue +14%. This is the fourth straight fiscal year of building accruals — an even longer streak than the 3-year mark that already signals a materially stronger tell. The cash-flow cross-check is more mixed: reported earnings ran in line with operating cash by 5% of net operating assets, diverging from the balance-sheet accrual read.
309d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 169 to 309 FY2024→FY2025 (against cost of goods sold; inventory +81% vs +8% in cost of sales). Inventory is outrunning what's being sold — a flag for softening demand or obsolescence risk ahead.
6.5%
FY2025
Return on invested capital.Return on invested capital is 6.5% in the latest fiscal year and rising from -61% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+2.0%/yr
FY2022–FY2025
Share-count dilution.Diluted share count changed +6% over the last 3 years to FY2025 (+2.0%/yr). The count is growing: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~2.0% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~6%.
Key fundamentals
Latest Revenue$912.0M
Revenue Growth YoY+13.6%
Revenue CAGR (3yr)+30.8%
Net Margin15.9%
Free Cash Flow$78.5M
Return on Equity18.6%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Inspire Medical Systems, Inc.'s actual 10-K/10-Q/8-K filings?
Data from SEC EDGAR public filings · metrics as of Aug 11, 2026. Forensic signals flag probability, not certainty.
223% of FCF
FY2025
Shareholder returns.Returned $175M to shareholders (buybacks + dividends) in FY2025 — 223% of free cash flow. More than free cash flow generated — and beyond operating cash too, so the extra is coming from debt or cash reserves, which isn't sustainable indefinitely. Counting the $130M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 389%.
14% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 14% of revenue and 166% of free cash flow in FY2025 — about $4.38 per diluted share. The cost of it is not in the cash flow — no cash left the business — it is in the count, and there it has run at about 2.0% a year and is falling.
Inspire Medical Systems, Inc. (INSP) Stock — Forensic Analysis, Red Flags & Rating | Stockonomy · Stockonomy