Inspire Medical Systems Inc (NYSE:INSP): A High-Growth Stock with Strong Fundamentals and Technical Setup Potential

Investors looking for high-growth opportunities often search for companies that combine solid fundamentals with positive technical setups. The "Strong Growth Stocks with Good Technical Setup Ratings" screen finds stocks showing strong earnings and revenue growth, good profitability, and stable financials, while also displaying technical patterns that may indicate upcoming price movements. This method targets stocks likely to gain momentum, using both financial strength and market timing.

One example is Inspire Medical Systems Inc (NYSE:INSP), a medical technology company focused on minimally invasive treatments for obstructive sleep apnea. The company’s financials and technical setup make it an interesting example for this approach.

Fundamental Strengths Supporting Growth

Inspire Medical’s fundamental analysis report points to several important strengths:

• Strong Growth Metrics:

  • Revenue has increased by an average of 57.78% annually in recent years, with last year’s EPS rising by 494.55%.
  • Future estimates indicate ongoing growth, with earnings projected to grow by 33.18% per year.
  • The company’s Gross Margin (84.65%) is among the top 5% in its industry, showing effective pricing and cost control.

• Good Profitability & Financial Stability:

  • Despite its growth focus, Inspire has a Return on Equity (10.46%) and Return on Invested Capital (6.83%) that are better than many competitors.
  • The balance sheet is strong, with no debt, a Current Ratio of 9.01, and an Altman-Z score of 25.60, suggesting very low bankruptcy risk.

• Fair Valuation for Growth:

  • While the P/E ratio (59.38) seems high, it’s lower than 67.91% of industry peers when growth is considered (the PEG ratio indicates a reasonable valuation).

These financials match the growth investing principles discussed in our introduction, which favor companies in growing markets with strong execution and reinvestment potential. Inspire’s focus on the sleep apnea treatment market—a large and underpenetrated industry—supports its long-term growth outlook.

Technical Setup Indicating Possible Movement

The technical analysis report shows a mixed but notable setup:

• Trading Near Support:

  • The stock has moved between $124.45 and $143.96 over the past month, currently near the lower end.
  • A key support area lies between $125.14 and $128.42, formed by trendlines and moving averages. Holding this level could set the stage for upward movement.

• Key Resistance Levels:

  • Immediate resistance is at $132.42–$132.55, with higher levels at $137.17–$139.26. Breaking above these could attract more buyers.
  • The stock’s Setup Rating of 8/10 suggests a good risk/reward balance, with lower volatility and clear support-resistance levels.

• Long-Term Potential Despite Recent Weakness:

  • While short- and long-term trends are negative (underperforming 83% of stocks in the past year), the current position near support, along with strong financials, may offer a chance for contrarian investors.

Why This Pairing Works

Growth stocks with technical setups often perform well because:

1. Financials support the move: Earnings growth increases the chance of lasting price gains.
2. Technical signals confirm interest: Breakouts show institutional buying and less selling pressure.

For Inspire Medical, the mix of high growth, profitability, and a possible technical turnaround (if support holds) makes it a candidate for investors willing to accept the volatility common in growth-focused medtech stocks.

Find More Growth Stocks with Technical Setups

This screen identifies one stock meeting strict growth and technical criteria. For more ideas, check our Strong Growth Stock Technical Setups Screen, which filters for similar opportunities.

Disclaimer: This article is not investment advice. Do your own research or consult a financial advisor before making investment decisions.