InMode is Friday's IBD Stock Of The Day. The medical aesthetics company says it's shrugging off recessionary concerns and INMD stock is smoothing out the wrinkles.
The company recently pre-announced $133.2 million to $133.4 million in fourth-quarter sales, up 21% year over year. Shares dropped on the pre-announcement as it suggested a slowdown in growth from 29% in the three months ended Sept. 30.
Chief Executive Moshe Mizrahy says InMode is still growing. He noted the guidance for this year indicates sales will grow by roughly $75 million. Notably, that also suggests a slowdown.
"But the market knows that we are very conservative in guidance," he said during the Needham Growth Conference last month.
INMD stock is currently consolidating with a buy point at 40.39, according to MarketSmith.com. Shares surged above their 50-day moving average this week. The stock dropped 2.8% to close at 37.24 on the stock market today.
INMD Stock: Guidance Conservative
InMode's devices use radio frequency technology to tighten skin and kill fat cells. The procedures are minimally invasive, meaning they can be performed in a doctor's office.
During the fourth quarter, InMode's sales came in between $133.2 million to $133.4 million, the company said in its pre-announcement.
That leads to full-year sales of $453.9 million to $454.1 million. At the midpoint, sales would grow 27%. For 2023, InMode guided to $525 million to $530 million in sales, up 16%. That means sales growth over the last two years paled in comparison to a nearly 74% jump in 2021.
But Mizrahy says the guidance is conservative and InMode often outdoes itself. Needham analyst Mike Matson also noted the same. He sees the potential for new products launching this year could boost sales.
He has a buy rating and 60 price target on INMD stock. The company will officially report its fourth-quarter earnings on Feb. 14.
Medical Aesthetics Strong
Medical aesthetic sales don't seem to be slowing. The IBD 50 is headed up by Revance Therapeutics, a maker of skin-tightening and facial-filling shots.
But InMode also sees an opportunity to carve a new market in women's health. It's testing a system called EmpowerRF in 15 clinical studies. Today, the system treats weak pelvic floor muscles, works to improve blood circulation, remodels tissue and strengthens abdominal muscles.
But Chief Medical Officer Spero Theodorou notes the same system is capable of running aesthetic procedures. Gynecologists treating weak pelvic floor muscles or overactive bladder could also sell their patients on aesthetic procedures. The latter is where the "big money is," he said.
Next, InMode hopes to do the same with its EnvisionRF system for dry eye treatment.
Promisingly, INMD stock has a strong Composite Rating of 91. This puts shares in the top 9% of all stocks when it comes to fundamental and technical measures, according to IBD Digital. Shares have an even stronger EPS Rating of 97 out of 99, a measure of profitability. It's also on the IBD Tech Leaders list.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
