InMode (INMD) AI Stock Analysis

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InMode

(NASDAQ:INMD)

Rating:70Outperform

Price Target:―

InMode's overall stock score of 70 reflects a mix of strong financial performance and undervaluation, tempered by current bearish technical indicators and cautious earnings guidance. The company's robust balance sheet and profitability are significant strengths, supporting long-term resilience. However, the short-term challenges, including declining revenue and reduced margins, along with bearish market momentum, present risks that investors should consider.

Positive Factors

Company Quality

InMode is viewed as a high-quality company with premium product offerings and an innovation pipeline that is best-in-class.

Long-term Positioning

In the long-term, the company will be positioned to outperform its peers once market conditions improve.

Share Buyback

INMD announced another tax-efficient share repurchase program of up to 10% of its total shares outstanding.

Negative Factors

Consumer Demand

INMD has not seen an increase in the number of consumables sold despite adding more capital to the market, implying ongoing weakness in consumer demand.

Market Environment

The macro environment faces new headwinds, like tariffs and market uncertainty, which could further dampen provider and consumer demand.

Revenue Guidance

INMD reiterated its previous revenue guidance and lowered its 2025 EPS guidance due to the impact of tariffs and an increased international mix.

InMode (INMD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$934.17M

Dividend YieldN/A

Average Volume (3M)1.04M

Price to Earnings (P/E)5.7

Beta (1Y)1.33

Revenue Growth-15.84%

EPS Growth9.26%

CountryUS

Employees599

SectorHealthcare

Sector Strength53

IndustryMedical - Devices

Share Statistics

EPS (TTM)0.31

Shares Outstanding69,558,670

10 Day Avg. Volume1,212,697

30 Day Avg. Volume1,039,567

Financial Highlights & Ratios

PEG Ratio-5.29

Price to Book (P/B)5.31

Price to Sales (P/S)0.00

P/FCF Ratio16.36

Enterprise Value/Market Cap3.05

Enterprise Value/Revenue1.75

Enterprise Value/Gross Profit9.08

Enterprise Value/Ebitda5.76

Forecast

1Y Price Target

$17.25

Price Target Upside29.02% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

InMode Business Overview & Revenue Model

Company DescriptionInMode Ltd. designs, develops, manufactures, and markets minimally invasive aesthetic medical products based on its proprietary radiofrequency assisted lipolysis and deep subdermal fractional radiofrequency technologies in the United States and internationally. The company offers minimally invasive aesthetic medical products for various procedures, such as liposuction with simultaneous skin tightening, body and face contouring, and ablative skin rejuvenation treatments, as well as for use in women's health conditions and procedures. It also designs, develops, manufactures, and markets non-invasive medical aesthetic products that target an array of procedures, including permanent hair reduction, facial skin rejuvenation, wrinkle reduction, cellulite treatment, skin appearance and texture, and superficial benign vascular and pigmented lesions, as well as hands-free medical aesthetic products that target a range of procedures, such as skin tightening, fat reduction, and muscle stimulation. The company was formerly known as Invasix Ltd. and changed its name to InMode Ltd. in November 2017. InMode Ltd. was incorporated in 2008 and is headquartered in Yokneam, Israel.

How the Company Makes MoneyInMode makes money primarily through the sale of its medical aesthetic devices, which utilize proprietary radio-frequency technology. The company generates revenue by selling these devices to plastic surgeons, dermatologists, and other medical professionals worldwide. InMode's business model also includes recurring revenue streams from the sale of consumables and disposables that accompany the use of its devices, such as treatment tips and handpieces. Additionally, InMode offers training and support services to ensure effective and safe use of its products, further solidifying customer relationships and enhancing device utilization. Strategic partnerships with leading healthcare providers and an extensive distribution network also contribute to the company's revenue growth by expanding its market reach and customer base.

InMode Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: -17.57%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Negative

InMode faces significant challenges with declining revenue, reduced margins, and the impact of U.S. tariffs. Despite completing a significant share purchase program and strong international sales, the financial performance this quarter was underwhelming, leading to reduced guidance for 2025.

Q1-2025 Updates

Positive Updates

Shareholder Return Program

InMode completed its fifth share purchase program this month, purchasing 6.95 million shares totaling $127 million. Over the past 12 months, the company has returned more than $412 million to shareholders through share purchases, representing approximately 27% of total capital.

Strong International Sales

First quarter sales outside of the U.S. accounted for $38 million, representing 49% of total sales, a 1% increase compared to the same period last year. Europe was the largest revenue contributor from outside the U.S. and reached a record sales number.

Negative Updates

Revenue Decline

Total revenue for Q1 2025 was $77.9 million, a decrease of 3% compared to the first quarter of 2024.

Decreased Gross Margins

Gross margin was 78% on a GAAP basis, compared to 80% in Q1 2024. Non-GAAP gross margins were 79% versus 80% in the same period last year.

Operating Margin Decline

GAAP operating margin in Q1 2025 was 20%, down from 23% in Q1 2024. Non-GAAP operating margin decreased to 23% from 27% in the first quarter of 2024.

Reduced Earnings per Share

GAAP diluted earnings per share for Q1 2025 were $0.26 compared to $0.28 in Q1 2024. Non-GAAP diluted earnings per share were $0.31 compared to $0.32 in Q1 2024.

Impact of U.S. Tariffs

With U.S. tariffs at their current levels of 10%, the company anticipates an impact of approximately 2% to 3% on gross margins. The situation remains fluid, with potential for increased tariffs.

Guidance Reduction

Revised guidance for 2025 includes revenues between $395 million to $405 million, down from previous guidance of $400 million to $410 million, and non-GAAP gross margins between 78% to 80%, compared to prior guidance of 80% to 82%.

Company Guidance

During InMode's First Quarter 2025 Earnings Results Conference Call, the company provided updated guidance amidst ongoing macroeconomic challenges. InMode's Q1 2025 revenue was reported at $77.9 million, reflecting a 3% decrease compared to the same period in the previous year. The gross margin was 78% on a GAAP basis, down from 80% in Q1 2024. The company noted that minimally invasive platforms accounted for 87% of total revenues, with international sales contributing $38 million or 49% of total sales, marking a 1% increase from Q1 2024. Operating expenses were $45.3 million on a GAAP basis, a slight 1% decrease year-over-year. The GAAP operating margin was 20%, down from 23% in Q1 2024, while GAAP diluted earnings per share were $0.26, compared to $0.28 in Q1 2024. For 2025, InMode reiterated its guidance for revenues between $395 million to $405 million, adjusted its non-GAAP gross margin guidance to 78%-80%, and expects non-GAAP earnings per diluted share between $1.64 to $1.68, reflecting adjustments due to factors like U.S. tariffs. The company remains committed to maintaining its workforce and leading the industry into the future, despite current economic pressures.

InMode Financial Statement Overview

Summary

InMode presents a robust financial profile characterized by strong profitability, excellent balance sheet health, and solid cash flow generation. While revenue growth has tempered recently, the company's low leverage and efficient operations support its financial resilience and potential for sustained performance in the Medical Devices industry.

Income Statement

Very Positive

InMode has demonstrated strong profitability with a consistent Gross Profit Margin of around 80% over the years. While Revenue Growth has slowed in recent periods, with a slight decline in the latest TTM period, the company maintains a robust Net Profit Margin averaging over 40%. The EBIT and EBITDA margins also reflect efficient operational performance, indicating strong profitability in the Medical Devices industry.

Balance Sheet

Very Positive

The company exhibits a very healthy balance sheet with a Debt-to-Equity Ratio consistently below 0.02, showcasing low leverage and minimal debt reliance. Return on Equity (ROE) remains strong, often exceeding 20%, indicating efficient use of equity capital. The Equity Ratio is high, further emphasizing the company's financial stability and low risk profile.

Cash Flow

Positive

InMode's cash flow performance is solid, with strong Free Cash Flow generation and a Free Cash Flow to Net Income Ratio typically exceeding 0.6. Although the Free Cash Flow Growth Rate has decreased in recent periods, the Operating Cash Flow consistently covers Net Income, indicating healthy cash conversion and operational efficiency.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
392.41M	394.82M	492.05M	454.27M	357.56M	206.11M
	Gross Profit
314.06M	317.07M	411.34M	380.79M	303.97M	175.26M
	EBIT
110.06M	112.53M	195.66M	197.85M	167.48M	72.84M
	EBITDA
110.79M	113.26M	196.28M	198.53M	167.99M	73.26M
	Net Income Common Stockholders
175.78M	181.28M	197.92M	161.52M	164.97M	75.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
512.92M	596.47M	741.61M	547.38M	415.91M	260.53M
	Total Assets
704.74M	785.67M	863.29M	644.41M	478.54M	295.76M
	Total Debt
5.59M	7.82M	9.02M	4.96M	3.31M	358.00K
	Net Debt
-140.36M	-147.51M	-135.39M	-92.58M	-64.83M	-68.58M
	Total Liabilities
85.31M	81.85M	75.91M	89.79M	62.74M	40.29M
	Stockholders Equity
619.43M	703.81M	787.37M	554.62M	415.80M	255.47M
Cash Flow		Free Cash Flow
121.41M	132.00M	176.12M	180.00M	173.95M	78.76M
	Operating Cash Flow
122.05M	132.66M	176.83M	181.58M	174.88M	79.22M
	Investing Cash Flow
285.32M	162.21M	-136.06M	-109.47M	-160.11M	-43.30M
	Financing Cash Flow
-381.75M	-282.77M	5.50M	-41.09M	-15.02M	-12.44M

InMode Technical Analysis

Technical Analysis Sentiment

Negative

Last Price13.37

Price Trends

50DMA

14.61

Negative

100DMA

16.45

Negative

200DMA

16.90

Negative

Market Momentum

MACD

-0.34

Positive

RSI

34.84

Neutral

STOCH

9.35

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INMD, the sentiment is Negative. The current price of 13.37 is below the 20-day moving average (MA) of 14.28, below the 50-day MA of 14.61, and below the 200-day MA of 16.90, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 34.84 is Neutral, neither overbought nor oversold. The STOCH value of 9.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INMD.

InMode Risk Analysis

InMode disclosed 61 risk factors in its most recent earnings report. InMode reported the most risks in the "Production" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

We have limited business in Russia which pose some degree of sanctions risk that cannot be entirely eliminated. Q4, 2022

InMode Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INMD	70 Outperform	$934.17M	5.75	24.50%	―	-15.84%	9.26%
AORT	68 Neutral	$1.23B	―	-7.25%	―	5.94%	-115.82%
FNA	59 Neutral	$1.10B	―	-36.39%	―	18.39%	6.08%
ESTA	56 Neutral	$1.13B	―	-186.68%	―	9.27%	1.51%
Sector *	54 Neutral	$5.34B	3.36	-45.10%	3.39%	16.81%	-0.03%
ATEC	51 Neutral	$1.61B	―	-291.71%	―	25.53%	23.22%
BVS	47 Neutral	$542.15M	―	-19.79%	―	8.60%	-42.76%

* Healthcare Sector Average

Performance Comparison

INMD

InMode

13.37

-4.44

-24.93%

ATEC

Alphatec Holdings

10.89

0.64

6.24%

AORT

Artivion

29.77

6.67

28.87%

ESTA

Establishment Labs Holdings

37.41

-5.32

-12.45%

BVS

Bioventus

6.43

0.83

14.82%

FNA

Paragon 28

13.09

7.35

128.05%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.