INSP
Inspire Medical Systems, Inc.
$51.76
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 144.3% above fair value
Bear
$21.19
-59.1%
6% stage 1 growth, 11% discount
Fair
$21.19
-59.1%
9% stage 1 growth, 11% discount
Bull
$21.19
-59.1%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
0%
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $56.00 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $21.19 per share.
Warnings
Stock-based employee pay equals 90% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $56.00 (from 27 analysts). Our estimate is 83% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions