Inspire Medical Systems (INSP) Hit by Execution Difficulties in Q3

 TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 2.26% (gross) and 2.01% (net), compared to the Russell 2000 Growth Index’s 12.19% return. During the quarter, all asset classes except fixed income outside the U.S. posted positive returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Inspire Medical Systems, Inc. (NYSE:INSP). Inspire Medical Systems, Inc. (NYSE:INSP) is a medical technology company that focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea. The one-month return of Inspire Medical Systems, Inc. (NYSE:INSP) was -32.57%, and its shares lost 56.01% of their value over the last 52 weeks. On January 5, 2026, Inspire Medical Systems, Inc. (NYSE:INSP) stock closed at $94.76 per share, with a market capitalization of $2.802 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Inspire Medical Systems, Inc. (NYSE:INSP) in its third quarter 2025 investor letter:

"Climbing by 79% was Merus, a biopharma developer of immune-oncology treatments for certain tumors. At the start of the quarter, Merus’s shares rose following positive clinical trial indications for its metastatic colorectal cancer treatment. Offsetting that was a -38% partial quarter loss from Inspire Medical Systems, Inc. (NYSE:INSP), which develops medical equipment to treat obstructive sleep apnea. We had been optimistic about the rollout of its newest generation device, but Inspire had difficulty executing that earlier this year. Those problems persisted, so we exited the position."

Inspire Medical Systems, Inc. (NYSE:INSP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Inspire Medical Systems, Inc. (NYSE:INSP) at the end of the third quarter, which was 34 in the previous quarter. In Q3 2025, Inspire Medical Systems, Inc. (NYSE:INSP) reported revenue of $224.5 million, marking a 10% increase from Q3 2024. While we acknowledge the potential of Inspire Medical Systems, Inc. (NYSE:INSP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Inspire Medical Systems, Inc. (NYSE:INSP) and shared Wasatch Small Cap Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.