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Investing.com - InMode Ltd . (NASDAQ:INMD) reported preliminary second-quarter revenue below analyst expectations and reduced its full-year guidance, while BTIG maintained its Neutral rating on the stock. According to InvestingPro data, six analysts have recently revised their earnings expectations downward for the upcoming period.
The aesthetic medical device company expects Q2 revenue of $95.4-$95.5 million, representing 10.5% year-over-year growth, but falling short of the consensus estimate of $99.2 million and BTIG’s projection of $100 million. After adjusting for unrecognized revenue in the year-ago period, the growth rate would be negative 7.0% year-over-year.
InMode anticipates adjusted gross margin of 79-80% for the quarter, exceeding the consensus estimate of 77.6% and BTIG’s forecast of 79.0%.
The company lowered its 2025 revenue guidance by $30 million to $365-$375 million, representing a 6% year-over-year decline at the midpoint. InMode attributed the reduction to "continued market weakness and uncertainty in the U.S. economic environment." Despite these challenges, InvestingPro analysis suggests the stock is currently undervalued, trading at an attractive P/E ratio of 6.49x with a strong financial health score.
InMode is scheduled to host its second-quarter earnings call before market open on Wednesday, July 30, when more details about the revenue split between capital equipment and consumables, along with margin outlook, are expected to be provided. Get deeper insights into InMode’s financials and access exclusive analysis with a comprehensive Pro Research Report, available on InvestingPro.
In other recent news, InMode Ltd. has been at the center of several developments affecting its operations and investor outlook. The company recently surpassed preliminary results for its first quarter, but Canaccord Genuity revised its price target for InMode to $15 from $17, maintaining a Hold rating due to economic challenges and a decline in consumer demand. BTIG also downgraded InMode from Buy to Neutral, expressing concerns about the company’s ability to meet its FY25 revenue guidance amid a contracting medical aesthetics market. Despite these challenges, InMode’s CEO, Moshe Mizrahy, defended the company’s strategic decisions in a response to shareholder concerns, highlighting significant share buybacks totaling $412 million in the past year.
Additionally, InMode secured a legal victory against counterfeit sellers, with a U.S. District Court granting a permanent injunction to halt the sale of unauthorized products. This court decision underscores InMode’s commitment to consumer safety and trademark protection. Meanwhile, DOMA Perpetual Capital Management has called for a change in leadership, urging InMode’s board to replace CEO Moshe Mizrahy and resume its share repurchase program. The investment firm argues that the company’s cash reserves, which constitute about 60% of its market cap, should be returned to shareholders.
InMode has also faced criticism from DOMA Perpetual regarding its production strategy and capital allocation, suggesting that moving some production outside Israel could mitigate risks. The company’s decision to expand its commercial teams amid declining productivity and increasing costs has been questioned by analysts, given the current market conditions. Despite these challenges, InMode remains focused on its long-term strategy, which includes enhancing its commercial infrastructure and protecting its proprietary technology.
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