iRhythm Plummets 8% Despite Strong Performance and Guidance Adjustments

iRhythm Technologies (IRTC) shares closed at $155.44 on Nasdaq on the 13th (local time), down 7–8% intraday. The company’s market capitalization fell by about $365.8 million—roughly 529 billion Korean won—in a single day. This marks the second consecutive day of price consolidation following its business update and 2026 outlook presentation at the J.P. Morgan Healthcare Conference.

The immediate catalyst for the sell-off was the company’s medium-term growth and profitability roadmap. In its January 12 release, iRhythm said 2025 revenue is now expected to exceed the top end of prior guidance at $740 million. It projected 2026 revenue of $870–880 million and an adjusted EBITDA margin of 11.5–12.5%. Despite anticipating positive free cash flow in 2025 and revenue growth above 25%, investors appear to have taken profits and reevaluated the stock’s high valuation, cost structure, and pace of margin improvement. Nonetheless, major brokerages including Wells Fargo and Morgan Stanley have maintained “overweight” ratings, with target prices of $225 and $205, respectively, signaling continued confidence in the company’s long-term growth prospects.

iRhythm Technologies is a digital health firm specializing in remote cardiac monitoring. Its core offering combines the wearable Zio® patch electrocardiogram (ECG) monitor—which patients wear for an extended period—with cloud-based algorithms that analyze vast amounts of ECG data to detect arrhythmias and other heart-rhythm abnormalities early. Building on its leadership in the U.S. ambulatory cardiac monitoring market, iRhythm has expanded into Japan and Europe and is now extending its reach with AI-driven risk stratification and adjacent-disease diagnostics, such as sleep apnea screening.

Financially, the company is already on a high-growth trajectory. In 2024, revenue rose about 20% year-over-year to $591.8 million, and 2025 revenue is forecast at $675–685 million—another double-digit increase. Beyond 2025, iRhythm expects growth to ease into the high teens percentage range, focusing on scale and operational efficiencies to drive margin expansion. The recent stock adjustment underscores the divide between investors’ short-term growth expectations and the company’s strategy to balance growth with profitability.