MIAMI - DOMA Perpetual Capital Management LLC, a significant shareholder in InMode Ltd. (NYSE: INMD), has called on the company’s board to resume its share repurchase program and to remove CEO Moshe Mizrahy. The investment firm, in a letter sent to InMode’s Board of Directors, criticized the CEO’s public statements on capital allocation and his management style, which they claim has led to the company’s stock price decline to near its 52-week low of $13.68.
InMode, a medical technology company, has seen its stock price fall despite previous buybacks, which DOMA Perpetual attributes to Mizrahy’s leadership. The firm asserts that Mizrahy’s comments on buybacks were "incorrect and damaging," emphasizing that the strategy’s value lies in long-term shareholder value, not short-term stock price movements. According to InvestingPro, the stock has declined over 22% in the past year, with particularly volatile price movements.
The firm also highlighted the company’s financial position, noting that InMode holds approximately 60% of its market cap in cash, has no debt, and generates significant free cash flow. With a market capitalization of $966 million and an impressive current ratio of 8.73, DOMA Perpetual argues that the cash should be returned to shareholders through buybacks, especially when the stock price is low. InvestingPro analysis indicates the company maintains strong financial health with an overall score of "GREAT."
DOMA Perpetual has suggested that InMode’s current valuation does not reflect the reality of its business, which includes an exceptional 80% gross margin and assets like the Morpheus8 brand and a recurring disposable business. Trading at a P/E ratio of just 6.11, InvestingPro analysis suggests the stock is currently undervalued. They believe that the company’s valuation and performance would improve with a new CEO and a recommenced share repurchase program.
The letter also expressed disappointment with Mizrahy’s refusal to consider moving some production outside of Israel, which DOMA Perpetual believes could reduce risks and costs.
The press release did not endorse InMode Ltd. and was based on publicly available information. It contained forward-looking statements and reflected the opinions of DOMA Perpetual based on their analysis and expectations. The information is based on a press release statement from DOMA Perpetual.
In other recent news, InMode Ltd. has been navigating a series of developments that have caught the attention of investors. The company recently secured a legal victory in its fight against counterfeit products, with a U.S. District Court ruling in its favor against sellers on DHGate. This legal win reinforces InMode’s commitment to consumer safety and trademark protection. Meanwhile, the company’s financial performance has prompted several analyst actions. Canaccord Genuity adjusted its outlook on InMode, reducing the price target to $15 while maintaining a Hold rating, citing economic challenges impacting revenue projections for 2025.
BTIG also downgraded InMode from Buy to Neutral, expressing concerns over the company’s ability to meet its FY25 revenue guidance amid a contracting medical aesthetics market. However, Jefferies provided a more optimistic perspective by upgrading InMode from Hold to Buy, despite lowering the price target to $15. Jefferies acknowledged the challenges but expressed confidence in InMode’s long-term potential. InMode’s revenue guidance for 2025 remains unchanged, but the company has noted the possibility of revisions if economic conditions do not improve. These developments illustrate the mixed sentiments among analysts regarding InMode’s future performance in a challenging economic environment.
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