Wednesday, InMode Ltd . (NASDAQ:INMD) shares, a medical aesthetic company currently trading at an attractive valuation according to InvestingPro analysis, received a reiterated Hold rating from Needham, following the company's announcement of its fourth quarter 2024 revenue guidance, which fell short of market expectations.
InMode, known for its medical aesthetic products, estimated its revenue for the quarter to be between $97.0 million and $97.5 million, a decrease of approximately 23% year-over-year, and below the consensus estimate of $114.2 million.
The shortfall in revenue was attributed to ongoing macroeconomic challenges affecting the aesthetic industry. Despite these challenges, InvestingPro data shows the company maintains robust financial health with virtually no debt and strong liquidity ratios.
Needham analysts pointed out that it was not clear whether the revenue miss was due to delayed shipments of new platforms or other issues that may have deferred earnings into 2025. In addition to the revenue guidance, InMode also adjusted its gross margin forecast for the third quarter of 2024 to 80-81%, a slight decrease from the previously expected 81-82%.
InMode did not provide specific non-GAAP EPS guidance for the fourth quarter, but Needham expressed skepticism about the company's ability to meet the consensus estimate of $0.59, given the significant revenue shortfall and reduced gross margin guidance.
Looking forward to 2025, InMode has projected revenue to be in the range of $395 million to $405 million, which is below the consensus estimate of $421.4 million, indicating a modest growth of 0-3% from 2024.
Further details are anticipated to be shared during InMode's fourth quarter 2024 earnings call, scheduled for February 6, 2025, at 8:30 am ET. As the economic outlook remains uncertain and the growth prospects for InMode are unclear, Needham has decided to maintain its Hold rating on the company's stock. For deeper insights into InMode's financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports.
In other recent news, InMode Ltd. faced operational challenges and a decrease in sales, leading to a revision of its 2024 guidance, as revealed in their latest earnings call. The company reported a total revenue of $130.2 million, down from previous forecasts, and adjusted its full-year revenue outlook due to a challenging economic environment.
Despite these difficulties, InMode posted a gross margin of 82% and an increase in GAAP diluted earnings per share to $0.65. The company also announced management changes to better align with market conditions and ensure employee safety in Israel.
InMode's Q3 net sales amounted to $98.3 million after accounting for preorders, and operating expenses rose to $57.9 million. The revised 2024 revenue guidance is now set between $410 million and $420 million. The company also introduced new products, IgniteRF and Optimus Max, attracting new customers.
However, the company noted a decline in U.S. consumables growth, with doctors performing 40% fewer treatments due to high costs. InMode also reported 610 system installations in Q3, a significant increase from the previous quarter, and maintains a strong cash position with $684.9 million in cash and equivalents. These are among the recent developments in InMode's operations.
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