What happened

In response to the company's report of strong second-quarter earnings, shares of InMode (NASDAQ:INMD), a medical device company focused on the aesthetic market, jumped 14% as of 10:15 a.m. EDT on Wednesday.

So what

The headline numbers from the second quarter looked great:

  • Revenue jumped 55% to $38.8 million.
  • Gross margin expanded 300 basis points to 87%.
  • Operating margin jumped 1,000 basis points to 41%.
  • Net income more than doubled to $15.8 million, or $0.45 per share.
  • Cash balance at quarter-end was $82.8 million. This figure doesn't include the $65 million that was raised from its IPO earlier this month, either.

CEO Moshe Mizrahy said, "We are pleased with our second-quarter results, which are consistent with both our reported expectations and the positive trends we are continuing to see in our business."

Plastic surgery doctor touching a patient face

Image source: Getty Images.

It's not often that a small-cap medical device maker is able to post profits right out of the gate, so it's understandable why traders are cheering today.

Now what

The market for aesthetic procedures and cosmetics is enormous and continues to grow. The American Society for Aesthetic Plastic Surgery estimates that U.S. consumers spent more than $8.5 billion in 2017 on aesthetic procedures. The numbers get even bigger when you zoom out and include the rest of the world. That provides companies like InMode with a long growth runway. 

An initial glance shows that there is a lot to like about this business. It's growing fast, highly profitable, founder-led, sports a debt-free balance sheet, and has a huge runway. Growth-focused investors might want to put this company on their radar.

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