Is InMode Ready To Explode?

Mar. 23, 2022 10:24 AM ETInMode Ltd. (INMD)41 Comments19 Likes
Eric Groovenhoff profile picture
Eric Groovenhoff


  • InMode continues its growth in the US and internationally.
  • Celebrities have adopted the company’s products.
  • Clinical trials for non-elective surgical equipment shows promise.


Juanmonino/E+ via Getty Images


Since I last wrote about the company last quarter, InMode’s (NASDAQ:INMD) stock price has declined 40%.

Over the same period, revenue has increased 17% (47% YOY), operating income by 20% (53% YOY), and net income by 18% (46% YOY). Gross margin has maintained at 85% (as CEO Moshe Mizrahy said it would when I interviewed him). Investors that bought based on daily prices are probably upset. However, we who buy based on fundamentals are indifferent. InMode remains extremely competitive with higher gross margins, net margins, and sales growth than others in its industry.

InMode & competitors sales

Revenue Growth- Percentage (SeekingAlpha)

InMode & competitors gross margin

Gross Margin (SeekingAlpha)

InMode Net margin

Net Income Margin (SeekingAlpha)

InMode net income

Net Income- Percentage (SeekingAlpha)

My long term outlook for the company has not changed. The products are superior, management continues to execute, and the potential growth runway is unchanged. In the lines that follow, I will reiterate my strong buy for InMode and show clinical trial data.

The Company- Update

As soon as Mr. Mizrahy mentioned treating stress urinary incontinence, I knew the potential of the company over the long term. The R&D has led to treatments of necessary health problems rather than elective aesthetic procedures.

Two things must be noted about this leap. First, this will do nothing to stop the growth of the current aesthetic product line. In Q3 transcripts, Mizrahy claimed to have 15 projects in the pipeline to add to its current line of aesthetic platforms.

The second is the possibility of InMode’s proprietary bi-polar RF technology treating various types of non-elective treatments. The first being the OBGYN market in a minimally invasive fashion. The OBG market currently sits at $24B in the US. I am unable to find worldwide OBGYN market size and growth projections and welcome it in the comments below.

InMode: Aesthetic

Beauty is a big business. The worldwide beauty cosmetics market was 380B in 2019 and expected to reach $463B by 2027. If the beauty market were a country, it would sit #30 behind the United Arab Emirates who's GDP was $382B in 2017.

The beauty market is also heavily influenced by celebrities. Companies pay millions for a familiar face to endorse their product and drive sales. But what if celebrities use a company’s product without endorsement? There is only one way for this to happen: that product or service is the best available.

InMode’s services have been used by multiple celebrities. The list includes Chrissy Teigen, Emma Roberts, and Britney Spears. Britney Spears actually posted a video of her treatment with InMode’s Emsculpt by Dr. Chiu. The former pop star inadvertently promoted InMode when she posted a shout out for her plastic surgeon using the Emsculpt. Dr. Chiu claims the InMode device “allows deeper treatments to reduce fat and cellulite, treat stretch marks and thickened scars, while tightening and rejuvenating the skin.”

An endorsement by a celebrity is one thing. But when they use a product or service on themselves without promotion with their beauty on the line? This clearly InMode’s products are the best available, or at least have that reputation. An official endorsement can be obtained in this peer report which claims that: “RFAL (Radio Frequency Assisted Liposuction) has created a whole new market segment of face and body consumers.”

InMode: Non-Elective

The first non-elective launch is the OBG platforms. Like the aesthetics platforms, the EmpowerRF will be launched in North America and work its way to the rest of the world. Projections for the Empower are $20M for the first year from which the company will move into a hard launch phase. But if the OBG platforms were to be successful long term, they must prove themselves in the marketplace and with clinical trials.

In National Library of Medicine's clinical trial, it concluded that RF technology is safe for postpartum pelvic floor treatments. I have other trial document images with positive results that I have attached below.

In short, the trials show that not only is InMode’s treatment in the OBG area safe, but is it effective. Most importantly, InMode’s (proprietary) biPolar RF is more effective than monoPolar RF technology. It is unknown what other non-elective treatments InMode currently has in R&D. But so far, every product they have launch has been top notch.

InMode clinical technology comparison

MonoPolar vs BiPolar RF (Wiley)

As you can see, the monopolar treatment isn't nearly as effective as the bipolar even if monopolar has more treatment time elapsed.

InMode Bipolar technology

Monopolar vs Bipolar (Wiley)

Summary from the same source.

InMode Clinical Trial

SUI Clinical Trial (PRS Global)

InMode Clinical safety trial



My opinion of InMode hasn’t changed a bit since I last wrote about it. The company has continued its dominance in its finances and with its reputation. If you are stumbling upon InMode as a potential investment at its current valuation, you have the opportunity to buy at a discounted price from when I first discovered and wrote about the company. I believe both of my writings will age very well over the next 3-7 years.

This article was written by

Eric Groovenhoff profile picture
I invest In common stock for the long-term. I look for explosive growth while attempting to minimize risks. I examine the fundamentals, financials, & intangibles of potential growth stocks. I create my own spreadsheets and perform my own research.  Although new to writing, I have been picking Stocks successfully for several years. I take Warren Buffett's advice and buy with the assumption the Market will be closed for several years the day after I buy it. However, I consider myself an offensive investor. My goal isn't to buy Amazon at $1T, my goal is to buy Amazon at $60B.  In order to do this, I must have good knowledge of business & economic history as well as a forward looking vision.  I try to ask myself "what void needs to be filled, and what fundamentally sound company can fill it."

Disclosure: I/we have a beneficial long position in the shares of INMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I have been & will continue to accumulate INMD on a DCA basis. It is my third largest holding.

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