Los Angeles, California – InMode, a leader in minimally invasive radiofrequency procedures, has faced challenges in the stock market recently. Despite the S&P 500 returning 15% in the same period, InMode’s stock has dropped by 7% since November.
The company recently disclosed its Q4 earnings, showing a revenue of $126.8 million, down from $133.6 million in the same quarter the previous year. However, gross margins remained stable at 84%, while net income was reported at $55.1 million. InMode’s management acknowledged challenges in the aesthetics industry but expressed optimism about two new platforms, Define and Envision, driving growth.
InMode’s reliance on US revenue from minimally invasive platforms has grown significantly, with 86% of their 2023 US revenues coming from these procedures, up from 71% in 2021. The company’s core technology is based on radio-frequency energy, which they believe sets them apart from competitors using optical energy.
The introduction of Define and Envision platforms has been highlighted by InMode, aiming to diversify their offerings. While non-invasive solutions are gaining popularity in the aesthetics industry, InMode’s revenue from non-invasive platforms remains relatively low at just 3% of US revenues.
Despite a healthy balance sheet showing cash equivalents of $741.6 million and a strong current ratio, InMode’s stock performance has lagged, facing a 43% drop in the past nine months compared to the S&P 500’s 17.83% increase. Analysts project $498 million in revenue for 2024, indicating modest year-over-year growth.
In conclusion, InMode is navigating a transition period, balancing its reliance on minimally-invasive procedures with the growing demand for non-invasive solutions in aesthetics. While the company’s low R&D expenditure may raise concerns, InMode’s leadership in RF procedures, sound financial position, and potential for growth make it a solid investment option. Investors seeking long-term prospects and willing to weather short-term volatility may find InMode’s stock appealing, especially considering its current valuation.
