iRhythm Holdings, Inc. (IRTC)

Price$111.75Cached quoteAs of 2026-09-18 13:17 UTC

AI: Fair-priced

Price checkThe shares look broadly fair only if rapid growth turns into much stronger cash generation.

At the observed market level, iRhythm’s equity value is about $4.1 billion. That is roughly 4.6 times the midpoint of 2026 revenue guidance and more than 100 times trailing free cash flow, meaning cash left after operations and capital spending. Those are demanding figures for a company still near break-even under standard accounting. Still, strong growth, a 72.8% second-quarter gross margin, and substantial liquid assets soften the concern. On balance, the price looks fair-priced rather than clearly cheap if margin expansion continues.

Big pictureRevenue growth is strong, but durable profits and shareholder-level cash returns remain early.

Revenue rose from $265 million in 2020 to $747 million in 2025, and second-quarter 2026 revenue increased 20.1% year over year. Operating cash flow improved sharply: trailing four-quarter operating cash flow is about $86 million and capital spending about $47 million, leaving roughly $39 million of free cash flow. However, trailing stock-based compensation is about $84 million, more than twice that cash surplus. That means recent cash progress is real, but part of the economic cost is being paid through new shares rather than cash.

Business strengthHigh gross margins and medical demand support resilience, but reimbursement rules still shape revenue quality.

Second-quarter gross margin reached 72.8%, showing attractive unit economics as volumes scale. Demand is less tied to consumer spending than many businesses, although iRhythm says prescriptions typically soften in the third quarter and around year-end holidays. Revenue also depends heavily on reimbursement: Medicare represented 26% of second-quarter revenue and contracted commercial payors 51%. The balance sheet is a cushion, with $591.3 million of unrestricted cash, cash equivalents, and marketable securities against about $76 million of debt before announced deal and settlement cash outflows.

What could change the storyBetter margins could create upside, while acquisition spending and continuing dilution could erase the valuation cushion.

The bull case is concrete: management guides to a 13%-14% adjusted EBITDA margin for 2026, meaning profit before interest, taxes, depreciation, and selected adjustments, while the new algorithm is expected to save about $100 million over five years. The bear case is capital allocation. VitalConnect requires about $237.5 million of cash plus $50 million of stock, with up to $30 million of interim funding, and Baxter received another $50 million. Despite a $25 million 2024 buyback, shares outstanding rose about 5% from late 2024 to mid-2026. Free cash flow must scale much faster than dilution for the observed valuation to work.

AI: News

Q2 growth and guidanceRevenue growth stayed above twenty percent, margins expanded, and management raised full-year expectations.

On August 6, iRhythm reported second-quarter revenue of $224.2 million, up 20.1% from a year earlier. Gross margin reached 72.8%, while the standard-accounting net loss narrowed to $0.4 million from $14.2 million. Free cash flow was $37.5 million, and management raised 2026 revenue guidance to $880-$890 million with a 13%-14% adjusted EBITDA margin. Investing.com showed an after-hours gain of about 6%, although the simultaneous VitalConnect announcement makes attribution uncertain.

VitalConnect acquisitionThe deal expands cardiac monitoring reach, but it also consumes significant cash and issues new shares.

Announced August 6, the planned VitalConnect purchase carries about $287.5 million of consideration: roughly $237.5 million in cash and $50 million in iRhythm stock, plus up to $30 million of interim financing before closing. The cash portion alone equals about 40% of iRhythm’s June unrestricted cash, cash equivalents, and marketable securities. The strategic logic is broader mobile, inpatient, and hospital-to-home monitoring; the financial tradeoff is a smaller liquidity cushion, new shares, and integration risk.

Algorithm cleared by FDAFDA clearance improves the cost-saving roadmap, though benefits depend on a successful 2027 rollout.

The FDA recorded a substantially equivalent decision for the ZEUS Platform on May 29, and iRhythm highlighted the clearance with its August results. Management expects the third-generation algorithm to launch in the first half of 2027, reduce clinician review time by roughly 50%, and create about $100 million of cumulative savings over five years. Those savings could materially widen margins, but they are management estimates, not realized cash, and the company still awaits formal closure of an existing FDA warning letter.

Legal and cyber costsSettlements reduced old legal uncertainty, while the June data breach added fresh compliance exposure.

iRhythm identified unauthorized access on June 8 and later confirmed data exfiltration from third-party applications, including sensitive patient and proprietary information. The company said it found no impact to products, patient safety, manufacturing, or clinical systems. Separately, it agreed to a $45 million securities settlement, mostly expected to be insured, and on July 31 paid $50 million to resolve Baxter-related patent litigation with no continuing royalties. These items clarify some liabilities but still consume cash and management attention.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014
Revenue	$747.1M	$591.8M	$492.7M	$410.9M	$322.8M	$265.2M	$214.6M	$147.3M	$99.1M	$64.1M	$36.1M	$21.7M
Gross profit	$527.3M	$407.5M	$331.8M	$281.6M	$213.6M	$194.9M	$162.1M	$108.5M	$70.9M	$43.2M	$21.4M	$11.2M
Gross margin	70.57%	68.86%	67.35%	68.54%	66.16%	73.50%	75.54%	73.66%	71.55%	67.41%	59.32%	51.30%
Research & development	$84.6M	$71.5M	$60.2M	$46.6M	$38.7M	$41.3M	$37.3M	$20.9M	$13.3M	$7.2M	$6.3M	$5.7M
Operating expenses	$584.7M	$523.0M	$457.0M	$395.4M	$313.5M	$238.6M	$216.8M	$154.2M	$98.5M	$58.8M	$43.1M	$25.9M
Operating income	−$57.4M	−$115.5M	−$125.2M	−$113.8M	−$99.9M	−$43.7M	−$54.8M	−$45.7M	−$27.6M	−$15.6M	−$21.6M	−$14.8M
Operating margin	−7.68%	−19.52%	−25.40%	−27.69%	−30.96%	−16.47%	−25.52%	−31.02%	−27.83%	−24.32%	−59.85%	−67.89%
EBITDA	−$36.7M	−$94.8M	−$108.9M	−$100.4M	−$90.1M	−$36.8M	−$51.3M	−$43.4M	−$26.0M	−$15.0M	−$21.1M	−$14.5M
EBITDA margin	−4.91%	−16.02%	−22.10%	−24.43%	−27.92%	−13.87%	−23.91%	−29.48%	−26.22%	−23.43%	−58.49%	−66.78%
Net income	−$44.6M	−$113.3M	−$123.4M	−$116.2M	−$101.4M	−$43.8M	−$54.6M	−$50.4M	−$29.7M	−$20.9M	−$22.8M	−$15.8M
Net profit margin	−5.96%	−19.14%	−25.05%	−28.27%	−31.40%	−16.53%	−25.43%	−34.21%	−30.00%	−32.62%	−63.09%	−72.79%
Basic EPSper basic share	-$1.39	-$3.63	-$4.04	-$3.88	-$3.46	-$1.58	-$2.16	-$2.11	-$1.31	-$3.95	-$16.57	-$12.05
Diluted EPSper diluted share	-$1.39	-$3.63	-$4.04	-$3.88	-$3.46	-$1.58	-$2.16	-$2.11	-$1.31	-$3.95	-$16.57	-$12.05

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

9.06%of listed shares

BlackRock, Inc.2.99M shares · Jun 30, 2026

View holders

Top 20 reported holders of IRTC
Holder	% owned
BlackRock, Inc.	9.06%2.99M shares
RTW INVESTMENTS, LP	6.63%2.18M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	5.81%1.91M shares
Artisan Partners Limited Partnership	5.04%1.66M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.44%1.46M shares
MILLENNIUM MANAGEMENT LLC	4.27%1.41M shares
FMR LLC	3.62%1.19M shares
UBS AM, a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC	2.87%944.52K shares
GEODE CAPITAL MANAGEMENT, LLC	2.68%881.9K shares
EVENTIDE ASSET MANAGEMENT, LLC	2.67%880.34K shares
BNP PARIBAS ASSET MANAGEMENT Holding S.A.	2.63%866.53K shares
STATE STREET CORP	2.60%856.52K shares
Holocene Advisors, LP	2.38%783.64K shares
JPMORGAN CHASE & CO	2.33%766.22K shares
Stephens Investment Management Group LLC	2.10%693.44K shares
FULLER & THALER ASSET MANAGEMENT, INC.	2.08%685.5K shares
BRAIDWELL LP	1.99%654.26K shares
D. E. Shaw & Co., Inc.	1.91%629.69K shares
MANUFACTURERS LIFE INSURANCE COMPANY, THE	1.70%561.25K shares
BLAIR WILLIAM & CO/IL	1.59%524.69K shares

Percentages use 32.94M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys3$578.8K disclosed value

Sells (SEC code S)102$44.22M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 2, 2026Form 4	Rosenbaum Marc WadeChief Accounting Officer	SellCommon Stock	729	$108.19	$78.9K	16.2K
Jun 2, 2026Form 4	Shrishrimal SumiEVP, Chief Risk Officer	SellCommon Stock	1.7K	$108.19	$185.7K	40.3K
May 11, 2026Form 4 · 10b5-1	TALWALKAR ABHIJIT YDirector	SellCommon Stock	290	$120.53	$35.0K	20.3K
May 11, 2026Form 4 · 10b5-1	TALWALKAR ABHIJIT YDirector	SellCommon Stock	1.1K	$119.16	$136.7K	20.6K
May 11, 2026Form 4 · 10b5-1	TALWALKAR ABHIJIT YDirector	SellCommon Stock	2.3K	$118.02	$270.6K	21.7K

Review ownership filings at SEC.gov ↗

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iRhythm Holdings, Inc. (IRTC)

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