InMode is Monday's IBD Stock Of The Day. After a bullish preannouncement, INMD stock is closing in on a cup-with-handle buy point.
The company makes noninvasive platforms that tighten skin and obliterate fat cells. It's also moving into the women's health realm with gynecological offerings. UBS analyst Danielle Antalffy says InMode provides a lower-cost alternative to traditional plastic surgery.
"Ultimately, InMode's lower price point vs. more invasive plastic surgery coupled with new markets and an increasingly strong brand awareness position InMode well to continue to grow through a potential recession," Antalffy said in a recent note to clients.
On today's stock market, INMD stock recovered to gain 0.8% to 37.73.
INMD Stock: Is A Guidance Raise Coming?
Antalffy initiated coverage of INMD stock with a buy rating and 40 price target. That was in March. A month later, InMode shares surged more than 5% on a single day after the company preannounced better-than-expected first-quarter metrics.
The medical aesthetics company expects first-quarter sales to land at $105.7 million to $105.9 million. InMode also guided to 50-51 cents in adjusted per-share earnings. Both pieces of guidance beat analysts' projections. Sales would grow 23% while adjusted profit rises 26%-29%.
"We expect management to raise the annual guidance given the strong first-quarter results," Needham analyst Mike Matson said in a note.
But he maintained his hold rating on INMD stock. Like Antalffy, Matson says an economic slowdown could weigh on demand for InMode's aesthetic procedures. InMode has a long track record of double-digit sales and earnings growth.
Women's Health Offers New Growth
Antalffy, the UBS analyst, says it's still early innings for InMode's expansion into women's health. The company's device, EmpowerRF, strengthens weak pelvic floor and abdominal muscles, treats urinary incontinence and pain, and improves blood circulation.
"EmpowerRF gives InMode entree into what is currently a high-growth women's health market, which is benefiting from an increasing focus and awareness on women's health in general as well as gynecologists who are seeking new revenue streams from its existing patient base," she said.
She says INMD stock deserves its high valuation vs. peers due to its different technology and superior financials. InMode shares have a nearly perfect IBD Digital EPS Rating of 98. This means the company's recent profitability ranks in the top 2% of all stocks.
On a daily chart, INMD stock has formed a cup-with-handle base with a buy point at 38.48, MarketSmith.com shows.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
