Forensic Analysis · Medical Devices · as of Nov 8, 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.
C · Mixed — selective
Forensic grade
Safe
Financial health
9.9
Distress distance
Watch
Earnings quality
4
Forensic signals
19.8%
ROE
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 (auditor quality, say on pay, board independence, going concern). 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 C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 9.9, placing it in the Safe zone. 4 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 by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building sharply — a large slice of profit sits in operating assets, not cash. An accrual is a claim that still has to be collected or written down, so the gap resolves in a later period whichever way it goes. The build is led by inventory up +81% against +8% in cost of sales and receivables up +29% against revenue +14%. A cash-flow measure on the same base disagrees: reported earnings ran in line with operating cash by 5% of net operating assets, against an accruals ratio of 22.5%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
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.
223% of FCF
FY2025
Shareholder returns.Returned $175M to shareholders (buybacks + dividends) in FY2025 — 223% of free cash flow. That is $97M (123%) more than free cash flow covered, and more than operating cash flow as well. It came out of the balance sheet's own liquid holdings, not new debt: cash, short-term investments and long-term marketable securities fell $112M over FY2025. A payout past free cash flow draws the balance sheet down in every year it continues, 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%.
7.2%
FY2025
Return on invested capital.Return on invested capital is 7.2% in the latest fiscal year and rising across FY2023–FY2025 from -7.7%. After-tax operating profit was ($32M) in FY2023 and $46M in FY2025, with operating income at -6.4% of revenue in FY2023, 4.5% in FY2024 and 5.6% in FY2025. The capital base behind it grew +54% across FY2023–FY2025, from $413M to $638M, and the return did not fall doing it, so the dollars added over that window earned at least the -7.7% the older base was already earning. $333M of the $638M base at FY2025 is short-term investments and long-term marketable securities (52.2%) — securities held beside cash, which the base keeps because only cash is subtracted from it; they earn the balance sheet's yield, which is not in the operating profit above, so this rate understates what the operating capital earns.
Key fundamentals
Latest Revenue$912.0M
Revenue Growth YoY+13.6%
Revenue CAGR (2yr)+20.8%
Net Margin15.9%
Free Cash Flow$78.5M
Return on Equity19.8%
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?