Thread by @Patrick_Invests

$INMD very quietly posted a very strong quarter today

Revenues up 60% to $75.2M (6.3% beat)
GAAP EPS up 85% to $0.85 (27% beat)
86% GAAP gross margin (87% in Q4 2019)
47% GAAP operating margin (38% in Q4 2019)

International revenues up 102% (now 29% of total)
US revenues up 48%

Guides for $250-260M in revenues in 2021 (23.7% growth at midpoint) [$251.2M consensus]

Guides for Non-GAAP EPS of $2.34-$2.45 (13.5% growth at midpoint) [$2.19 consensus]

This quote was in response to the 2nd time an analyst had questioned the guidance (for good reason)

$INMD's $75M quarter = $300M run-rate

So why guide to only $255M in revenues?

1) There is some seasonality and Q4 is their biggest quarter

2) The guidance is VERY conservative

It will be interesting to see the analyst revisions because normally company guidance is pretty much input directly into models with maybe small changes. Contrarian changes are made after further analysis and provided normally in an update note.

But when the CEO first refers to the high end of guidance and then says "We will beat it", it's likely consensus is set above the guidance immediately.

$INMD does not provide quarterly guidance making this game even harder for analysts.

The new focus areas in 2021 are women's health and ophthalmology with the former's product Empower slated for a Q2 release and the latter awaiting an FDA approval (already submitted) within the next two months.

$INMD CEO Moshe Mizrahy took some time on the call to make it clear that InMode's products are far different from the "commodity-like" laser products offered by Alma, Venus, and Cutera. His most succinct quote:

"I don't think we have a recognized comparable or recognized peer."

As for $INMD the stock, it is up 47% YTD and now trades for 34.5x NTM GAAP EPS.

The guidance is a little perplexing, but demand is strong and InMode serves its niche very well so there is no reason to be worried.

$INMD serves a nice hedge as a recovery play, in contrast with several of my holdings being bets on the staying power of COVID trends ( $TDOC / telehealth is a good example)

I can easily see this being a tailwind during 2H '21 to help with the tough comps.

If 2021 GAAP EPS guidance is beaten by 20%, the multiple ends up under 29x, which makes adding here a little more reasonable.

I think $2.25 GAAP EPS is very likely, but without a pullback, I'll wait to add and continue to hold my position.

$INMD analyst revisions thus far:

UBS $64 --> $84
Baird $58 --> $84
Canaccord $69 --> $80

Haven't seen the reports yet, but UBS used non-GAAP EPS and Canaccord used an EV/Sales multiple to get to their previous PTs so the GAAP EPS multiples I used above have less meaning.

For those that haven't seen what $INMD's tech can do, I highly recommend going through the investor presentation below as the capabilities are nothing short of incredible.

inmodemd.com/wp-content/upl…

I'm attributing the selloff today to the lack of a guidance bump from the 1/12 pre-release. Given that was only 4 weeks ago, I don't know if that is fair.

Adding under $60 would make sense given their growth runway and lack of true competition make a <30x EPS multiple reasonable