InMode Stock (INMD Stock): Screaming buy with 90% growth, huge free cash flow & reasonable value?

I need your help! Is InMode a screaming buy? I'm having trouble sizing up their long-term potential. They've clearly done extremely well, but how sustainable is it for the future? Amazing financials!

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[nikolaskotsovolos]

I think yourself and the market in general is missing one thing here; the sale of their hand pieces will act as a recurring revenue. I spoke to a sales rep and he says a lot of the time what happens in clinics will buy a workstation with one or hand pieces and in future they come back to buy more hand pieces because it is cheaper to buy just the hand piece than a whole new machine. As InMode develops more of these hand pieces threw R&D spend they will be be able to scale revenue very easily and this network of clinic they get their workstations into will deliver recurring revenue.

Point two, currently the aesthetic device marker is ~$11 Billion world wide and InMode has ~2.7% of that market right now. The market in project to grow to ~$30 Billion by 2030. If you think (like I do) InMode can increase it's market share to ~6% over the next 9 years than the stocks at a very minimum a 6 bagger.

[paulkelly]

Great video. Good point about the one-time sales. In the last two years they have put out new products that have driven growth. I think the runway for sales is long because only 2 years ago they were talking about ramping up sales internationally. And those margins, no debt, lots of cash, no shareholder dilution!!!

[MeBee-flow]

This is an awesome company with excellent management, execution and vision for future growth.

[BorisGligorijevic]

My 2nd biggest position :) Great company. With that said, I have the same points as you. The way I see it is the company is in early stages and selling lots of products. Later, those products will need to be either maintened or bought again, which will incur fees. Once you have a big base of customers, it is much easier to sell additional services or even new products. Growth will slow down eventually, but no business can grow so fast indefinitely. What I like is the management performance and focus. I had 200% on this stock, now at +60%. I was also averaging up.
Now do Semler Scientific :) One of my newer positions, smaller, saas and a bit riskier.

[rossmcc]

About 10% of revenue is recurring in nature via services and peripherals. I think the big kicker in this company is continued worldwide growth as you are right you will end up with a saturated market in the USA. Perhaps (guess here) the replacement cycle is something like 5 years which would then lead sustained base growth in the future. Granted being an upfront seller isn't ideal but your current growth rate and product quality is worth investing in. I would think this is the type of business where growth tapers off and doesn't drop off a cliff as you are unlikely to have competitor come in steal market share quickly due to the reputation this company has. So the party is likely to continue for a while still.

[nishantgaurav]

I really liked your point about their one time nature of sale. I see INMD as a PTON kind of a stock, which clearly saw a demand of their bikes spike during pandemic, highly inflating their growth figures. After all you need these heavy machines just once.

I would also add that a lot of people have opted for plastic surgery operations as they were working from here, and the economy as a whole was doing better than average (Let's thank the fed for that). I am not sure if these inflated demands will continue moving forward.

[Boersenwunder-]

But what worries me a bit: What about such over-the-counter devices from $ 300 for personal use, such as the "Silk'n face tite essential"?
Apparently also works with bipolar RF technology. What are the differences to treatment with professional devices such as Inmode

[gman]

They do have recurring revenue ever time the machine does a procedure..the more units they sell. The more recurring revenue. Did you look at the preliminary Q4 earnings.. it was great and they reaffirmed the growth for next year which I am sure they will beat

[rezapanah]

Hello Daniel - I am a new subscriber to your channel and an active trader. Thank for drawing my attention to INMD. Yes agreed phenomenal growth figures so far, but also as you pointed out a very tough sales model to / performance to maintain. Re stock buybacks, I just don't think they are in a position to spend any cash reserves to buy back stock and this is not an option right now for them ! As a mainly technical trader, I don't like seeing down days on above average volume which is what I see here. Looking at the long term charts (weekly & monthly) I see some support around 46.00 but beyond that the next level is much lower around 30. So at the moment it goes on a watchlist with some alerts to see if it reaches those longer term support levels. Hope that gives you another perspective on INMD. Best. R.

[Manu_Money]

I think there is alot of growth in transforming your look. I have been looking at this stock for awhile now, thx for digging in to this company!

[aarondowling]

Could they hit a wall? Potentially. However I don't think that's a great way to think about an investment. Amazon could have hit a brick wall in the early days when they were selling books. They innovated. Any company can hit a brick wall. The fact is they have done the hard work by getting into alot of these medical practices and these companies obviously love the products. They have so many innovative products in the pipeline so these should be an easy cross sell to these customers with minimum marketing costs. The TAM is crazy so if they execute then I don't see why they couldn't keep growing and growing. Insider ownership, a crazy 35%, will also tell you that they are confident in their future. They could have cashed out after the crazy run they were on. I think I would have if the stock I owned almost x 4 in the year like it did. I just can't figure out how they are growing so fast without spending much money. How do they make so many innovative products without huge R&D costs. That does make me scratch my head a little but at the same time I can't fault a company for being operating efficient.

[Chrissers]

Might be time for a refresher on INMD which is down 37% since this video. Every metric appears that this stock is a real steal at the current price.

[MrAnarchocapitalist]

It sounds a bit like Intuitive Surgical 15 or 20 years ago. ISRG's stock took a 75% haircut in 2008 before going up 40x. ISRG was more medically necessary, though, rather than elective.

[geckomaniac]

Hey Daniel.
I wouldn't necessarily be too worried about the second business 'not thriving'.
Jack Dorsey had something similar going on with Twitter and Square.
On one hand, sure this CEO is running one business that isn't doing great but on the other, he's built one that is thriving. I think that's most important. It proves he is able to run a business well.
The market size of cosmetic surgery was some $50 billion in 2020, and for plastic surgeries we're looking at $20 billion.
I don't think they'll take entire market sectors, but your fear that this market will be satisfied soon seems excessive, considering that their TTM revenue is just $320 million, I don't think they're getting very close to satisfaction yet.

I'll take some closer looks at Inmode, thanks for showing it to us.

[LDP..]

who is here after the crash hoping to find a tiny treasure ? pls review this stock again

[jesusomarmontoyahernandez]

It would be great another analysis in this stock. thanks

[clouddeveloper]

I’m long INMD so take it as you will but I think what people are missing here is the underlying radio frequency technology that they’ve patented. They are essentially leveraging this technology in each new product for noninvasive procedures. This is how they keep their R&D costs so low and still crank out new products to market. Also, once they get in an office with one product, they continue to upsell with the other products. Essentially bringing Hollywood procedures to the masses and that is only one of their markets they are after.

[chinolo]

What do you think? i study this compnay nowadays seems amazing but only crash and crash who knows

[jeffposey]

We need to know if their products are a one-time sell, or if they have a plan to keep making money from past sales - in the same way that printer companies make money from selling proprietary ink cartridges after the initial printer sale. Or the way that car manufacturers make a big part of their revenue from their service departments after the warranties expire.

[Arkprog]

Looking into syneron has only given me more conviction in Inmode. Look at syneron’s 2006 annual report and look at their revenue growth and profitability then look at how the company did once they left to start a better company. Their sales and marketing expense did start going up a concerning amount in 2006 and 2007 though leading to decreases in profit despite big increases in revenue, but that might’ve been because of the worsening economy. Still synerons financials looked impressive while current Inmode management was there