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Why InMode Shares Are Soaring 13.7% Today

By Todd Campbell – Jul 13, 2020 at 3:46PM

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The medical device maker's boosting its second-quarter guidance.

What happened

InMode's (INMD) shares are skyrocketing 13.7% higher at 3:25 p.m. EDT on Monday after management announced its second-quarter 2020 revenue would likely be between $30.2 million and $30.6 million, which is significantly higher than analysts' outlook for $16.9 million. The company also increased its non-GAAP (adjusted) earnings-per-share outlook to between $0.20 and $0.22, again besting industry watchers' forecast for a loss of $0.09 per share.

So what

The healthcare company is disrupting the multibillion market for aesthetic treatments, including liposuction, with devices that use radio frequency energy to reduce scarring and improve recovery times. 

A toy rocket lifting off into the sky

Image source: Getty Images.

The upside guidance is encouraging given that management pointed to a standstill in aesthetic surgical procedures in May because of COVID-19. Although the company's sales grew a healthy 32% year over year to $40.4 million in the first quarter, InMode said there was "almost no activity in March."

Now what

Americans spend over $8 billion per year on aesthetic procedures, and over 20 million aesthetic procedures are done annually worldwide. Disrupting this market with a minimally invasive alternative to traditional surgery represents a big opportunity for revenue growth. 

While COVID-19 headwinds could still crimp InMode demand short term, management believes revenue will still essentially match 2019's. And since the company's handsomely profitable, with net income of $12.6 million in Q1, there's little risk slowing sales growth will cause a cash crunch, making this an intriguing stock to consider owning in portfolios.

 

Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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InMode Ltd. Stock Quote
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