On Friday, Jefferies adjusted its outlook on InMode Ltd . (NASDAQ:INMD), a medical technology company, by reducing the price target to $21 from the previous $24, while still maintaining a Buy rating on the company's shares. This decision comes after InMode announced preliminary results for the second quarter that fell short of expectations, along with a reduction in their full-year 2024 guidance.
The company's expected pro forma sales for the second quarter are estimated to be between $102.4 million and $102.5 million, which is notably lower than the consensus estimate of $116.6 million. The shortfall has been attributed to a weaker-than-anticipated aesthetics market and a transitional period following the pre-orders of new platforms launched earlier in the year.
InMode has also revised its full-year 2024 revenue forecast, now anticipating it to be in the range of $430 million to $440 million. This is a decrease from the previous guidance of $485 million to $495 million and falls below the consensus estimate of $480 million.
Following these announcements, Jefferies has recalibrated its projections for InMode, stating, "We are lowering our estimates and PT." The updated price target reflects the revised expectations for the company's financial performance in the coming year.
In other recent news, InMode Ltd. has been facing industry headwinds. The medical technology company reported first-quarter 2024 earnings with a total revenue of $80.3 million, but has adjusted its full-year guidance downward due to a slowdown in sales.
Despite a significant miss on operating margins, which came in at 27.5% compared to the anticipated 40%, UBS has decided to maintain a Neutral rating on InMode, while reducing its price target from $26.00 to $20.00.
InMode has launched two platforms, IgniteRF and Optimus Max, to bolster growth and manage the current economic challenges. The firm also highlighted that InMode has enough financial flexibility to continue investing in its business, which is expected to benefit the company once the economic climate improves. However, the uncertainty surrounding the macroeconomic situation poses a challenge for InMode's potential for sales growth or operating margin expansion.
Despite these challenges, InMode remains focused on fulfilling pre-orders and expects market demand to pick up in the second half of 2024 with a more favorable interest rate environment.
The company's updated 2024 guidance includes revenue between $485 million and $495 million, non-GAAP gross margins of 82%-84%, and non-GAAP EPS of $2.01-$2.05. These developments are part of InMode's recent strategic efforts to navigate the current economic landscape.
InvestingPro Insights
As InMode Ltd. (NASDAQ:INMD) navigates through a challenging period marked by lowered guidance and market expectations, it's worth noting the company's financial resilience and potential as highlighted by InvestingPro metrics and tips. With a P/E ratio of 7.87, which aligns closely with the last twelve months as of Q1 2024, InMode presents an attractive valuation in terms of earnings. Additionally, the company maintains a strong gross profit margin of 83.1%, emphasizing its ability to retain a significant portion of revenue after accounting for the cost of goods sold.
InvestingPro Tips indicate that InMode holds more cash than debt, which could provide a cushion against market fluctuations and operational uncertainties. Moreover, the company's liquid assets exceed its short-term obligations, further underscoring its financial stability. While two analysts have revised their earnings downwards for the upcoming period, which may cause concern, InvestingPro also notes that InMode is expected to be profitable this year and has been profitable over the last twelve months.
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