One of the tricks to bargain buys is that they tend to stop being bargains once enough people notice. On that note, shares of the Israeli medical aesthetics company InMode (INMD -0.97%) are up by more than 58% in the last six months, despite the market being flat and concerns about rising interest rates ravaging similar growth stocks.

If you're looking for exposure to growth at an acceptable price, there's reason to believe you'll still be getting a decent deal with InMode shares. Here's why.

The growth story remains sound

InMode's claim to fame is its minimally invasive devices for performing skin-tightening and fat-burning beauty treatments that aren't as burdensome for patients as other approaches like plastic surgery. It has a cornucopia of different hardware products, and customers create recurring cash flows for the company when they buy a device because they will also need to buy consumables and maintenance services for it.

Consumables take the form of replacement parts for devices and disposable elements that are designed to be in contact with patients. In a nutshell, the razor-and-blade business model is an appealing one, as it means the company's global base of installed devices implies years of follow-on revenue and an abundance of upselling opportunities.

Per its latest earnings report, customers are validating that idea: The company generated $13.9 million from sales of consumables in the third quarter, a 53% increase year over year. In total, sales of parts are becoming a larger share of the company's total revenue over time and, in turn, will make its earnings more consistent, assuming utilization trends remain the same.

So far, the takeaway is that aesthetics doctors with InMode devices are using them more frequently than before, which is a positive sign for the stock, to say the least. But does its valuation and actual growth trajectory warrant the price of its stock?

The price is right

Overall, InMode is valued attractively, and the gain of its shares over the last six months doesn't change that. InMode's trailing-12-month (TTM) price-to-earnings (P/E) ratio is roughly 16. That's lower than the market's average P/E of 21.2, which at its current valuation assumes annual earnings growth of around 9.5% on average.

Therefore, if InMode can be reasonably expected to expand its earnings at a pace of at least 9.5% annually over the next few years, it's priced at a deep bargain today. Let's investigate whether that pace is realistic, starting with a brief recap of its recent performance, as depicted in the chart below.

INMD Revenue (TTM) Chart

INMD Revenue (TTM) data by YCharts. TTM = trailing twelve months.

As you can see, the company's earnings growth leveled off a bit in 2022. But between 2019 and 2021, it grew its diluted earnings per share (EPS) at a compound annual growth rate (CAGR) of around 33.8%. And on average, Wall Street estimates the business will report $2.30 in diluted EPS this year, which would make for a gain of nearly 19.8% compared to a year prior. So by their estimate, InMode is currently valued quite inexpensively as its anticipated earnings return is significantly higher than the market's, even though its price is lower than what the market demands per dollar of earnings on average.

In practical terms, that means the stock is definitely still a bargain buy and ripe for purchase today. But investors should note a couple of risks before they dive in.

The bargain still comes with risks

First, InMode's status as a growth stock means its price is sensitive to the market's perception of what the Federal Reserve is doing about inflation by hiking interest rates. Though its debt of around $3.6 million is negligible (InMode currently has $486 million on hand), and the company's profitable -- so it won't need to raise money anytime soon -- the unfortunate fact is, higher interest rates lead to higher borrowing costs, which causes the market to dump growth-phase businesses.

Second, there's always the unlikely possibility of the company facing lawsuits from consumers injured by improper use of its devices. That's a risk with other medical device companies, too, and shouldn't dissuade you from investing. However, it's something to be aware of nonetheless.

So, if the prospect of riding out a dip in your InMode shares from a market phenomenon or an out-of-the-blue lawsuit doesn't bother you, invest away. On the other hand, if your chest gets tighter when you think about experiencing any type of losses that are largely out of the company's control, it's probably better to buy shares of a significantly larger and more mature business.