Inmode stock is down 9% today

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what happened

Shares in medical device companies Inmode (INMD -9.62%) The company dropped Wednesday after reporting preliminary results for its upcoming fourth quarter. It also gave direction for 2023. Both of those numbers looked good, but the stock still fell nearly 10% on Wednesday.

so what

On October 27, 2022, InMode gave full-year 2022 revenue guidance of $445 million to $450 million, implying revenue of $124.3 million to $129.3 million in Q4. Today, InMode reported preliminary Q4 revenue of $133.2 million to $133.4 million, exceeding previous guidance.

Considering InMode expects to beat its previous guidance, the 10% drop today is surprising. The company sells medical devices often used in cosmetic procedures and products that are used after the procedures are performed.

In this way the business model is similar Intuitive surgeryIts Intuitive Surgical stock fell today as it also reported preliminary financial results. But for intuitive surgery, the numbers were lower than Wall Street expected.

Perhaps InMode combined with the stock Intuitive Surgical. But admittedly, InMode’s drop is a head-scratcher considering its strong numbers.

what now

Some investors have questioned InMode’s prospects for 2023 as many economists expect a slowdown in the coming year. However, the company’s outlook is surprisingly strong. Management expects full-year 2023 revenue of $525 million to $530 million. For perspective, including its Q4 beat, it expects to report full-year 2022 revenue of about $454 million. Therefore, the 2023 guidance implies about 16% year-on-year growth.

This may explain InMode’s slowest growth rate in some time and today’s drop. That said, a 16% increase is nothing to sneeze at. And trading at just 16 times trailing earnings, it looks like a value stock investors should strongly consider right now.

John Quast has no position in any of the stocks mentioned. The Motley Fool has positions on and recommends Inmode and Intuitive Surgical. Motley Fool has a revealing policy.


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