On Friday, Baird reaffirmed its positive stance on InMode Ltd . (NASDAQ:INMD), maintaining an Outperform rating and a $22.00 price target. InMode, known for its medical technology for aesthetic procedures, reported preliminary third-quarter revenues of $130 million, a 6% year-over-year increase. This figure surpasses both Baird's estimate of $123 million and the consensus estimate of $118 million.
Despite the revenue beat, the report highlighted persistent pressures in the global aesthetics market. InMode's third-quarter pro-forma revenue, which excludes new system pre-orders from earlier in the year, saw a 20% year-over-year decline. In response to these market conditions, management has once again revised its full-year guidance downward. The updated forecast suggests that fourth-quarter revenues could drop by approximately 3-11% compared to the same quarter last year.
However, the projected decline for the fourth quarter would represent an improvement over recent trends. InMode's stock is currently trading at around 7 times its next twelve months' estimated earnings per share (EPS), which Baird suggests might be considered reasonable by investors given the context of "less bad" performance expectations.
The analyst's comments reflect a cautiously optimistic outlook, based on the premise that while the market for aesthetic procedures continues to face challenges, InMode's performance has not deteriorated as significantly as it has in the past. The firm's reiteration of the Outperform rating indicates confidence in the company's market position and its valuation at the current earnings multiple.
In other recent news, InMode Ltd. has projected a third-quarter revenue of approximately $130.0-130.1 million, surpassing market expectations and reflecting a 5.6% year-over-year growth. The company has also initiated a new share repurchase program, authorizing the buyback of up to 7.68 million ordinary shares. Despite these positive developments, InMode revised its full-year 2024 revenue guidance downward to $410-420 million.
Canaccord Genuity has maintained a Hold rating on InMode, citing ongoing risks and uncertainties. The firm's forecast for InMode for the fiscal year 2024 remains slightly below the company's guidance. InMode has also announced significant changes to its executive team in North America, including the departure of Shakil Lakhani, President of North America.
InvestingPro Insights
InvestingPro data provides additional context to InMode's financial situation and market performance. Despite the challenges in the aesthetics market, InMode maintains a strong financial position with a market capitalization of $1.37 billion. The company's P/E ratio of 9.08 aligns with Baird's observation of the stock trading at attractive multiples.
Two key InvestingPro Tips are particularly relevant to the article's discussion. First, "Management has been aggressively buying back shares," which could be seen as a sign of confidence in the company's future prospects despite current market pressures. Second, InMode "Holds more cash than debt on its balance sheet," indicating financial stability that may help the company navigate through the current market challenges.
These insights complement Baird's analysis, suggesting that while InMode faces headwinds, it maintains a solid financial foundation. For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for InMode, providing a deeper understanding of the company's position in the evolving aesthetics market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.