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Bull of the Day: InMode (INMD)

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Tracey Ryniec
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InMode Ltd. (INMD) is one of the most successful IPOs of 2019 as shares have soared nearly 200%. This Zacks Rank #1 (Strong Buy) is riding the social media "selfie" wave to double digit revenue growth in 2020.

InMode develops and manufactures devices harnessing novel radio-frequency (RF) based devices for the plastic surgery, gynecology, dermatology, otolaryngology and ophthalmology categories.

It's procedures are minimally-invasive.

InMode went IPO in August of 2019. It's a small-cap company with a market cap of $1.3 billion.

A Big Beat in the Third Quarter

On Nov 5, InMode reported its third quarter results and beat the Zacks Consensus by $0.13, or 44%. Earnings were $0.42 versus the consensus of $0.29.

Earnings were up 62% compared to third quarter 2018.

This was its second quarterly report to Wall Street after the IPO.

Revenue soared 57% year-over-year to a third quarter record of $40 million, fueled by a 88% increase in international revenue compared to 2018, driven primarily by European and Asian sales.

In the age of the "selfie" and Instagram (FB), consumers are willing to spend money on looking better. Procedures which are lower cost and have less downtime are becoming increasingly popular.

Earnings Estimates on the Rise

As a small cap company and recent IPO, there's little analyst coverage of InMode, so far.

But the Zacks Consensus Estimate for both 2019 and 2020 have been on the move higher since the big earnings beat.

Over the last 60 days, the 2019 Zacks Consensus Estimate has risen to $1.55 from $1.38.

Similarly, the 2020 Zacks Consensus has jumped to $1.76 from $1.55 during that same time.

That's earnings growth of 13.5%.

Shares on Fire

InMode is one of the few recent IPOs that is actually profitable. And given its product position in the Instagram generation, investors have jumped in to grab the shares.

Shares are up 189% since the August IPO.



They aren't crazy expensive for a small cap growth company, with a forward P/E of 27.

They compete with the big "selfie" type products like Allergan's (AGN) Botox.

Shares are down 14% over the past month as the rest of the stock market has rallied. A further pullback could be a buying opportunity.

For investors looking for ways to play the Instagram and social media craze, InMode is one to add to the short list.

The Hottest Tech Mega-Trend of All                 

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

 


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InMode Ltd. (INMD) : Free Stock Analysis Report
 
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Allergan plc (AGN) : Free Stock Analysis Report
 
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