Inmode Stock Update - When Am I Buying?
Summary
TLDRIn this video update, the speaker discusses the current state of InMode's stock, which has seen a bumpy ride since its IPO in 2019. Despite significant financial growth with revenues tripling and profitability nearly quintupling, the stock price has only risen by 15%. The speaker highlights the company's recent share buyback, which they view positively, and speculates on whether the stock's decline is due to external factors like interest rates and geopolitical conflicts or mismanagement. They express cautious optimism, stating they will consider buying more shares if they see a rebound in financial performance.
Takeaways
- 📈 The speaker is considering buying back into InMode stock after previously selling for a 300% profit.
- 📉 InMode's stock price has been volatile, experiencing both highs and lows since its IPO in September 2019.
- 💹 The company has shown significant financial growth with revenue tripling and profitability nearly quintupling since the IPO.
- 📉 Despite strong financials, InMode's stock price has only increased by 15% from its IPO price.
- 💸 InMode has a clean balance sheet with no debt and a large cash reserve, which has raised concerns due to a perceived lack of investment or buyback activity.
- 🔄 The company has recently initiated share buybacks, signaling a change in capital allocation strategy.
- 🚫 A major criticism of InMode has been the lack of dividend payments and share buybacks despite strong cash reserves.
- 📊 The speaker is cautious about reinvesting due to recent poor financial performance and is waiting for a rebound in growth.
- 🌐 External factors like interest rate hikes and geopolitical conflicts in Israel have negatively impacted InMode's business.
- 🔮 Analysts predict a potential rebound in InMode's financial performance in Q4 of the current year and beyond.
Q & A
What is the current stock price of InMode according to the transcript?
-The current stock price of InMode (INMD) is mentioned as $16.50.
When did InMode IPO and how has the stock performed since then?
-InMode IPOed around September 2019 at $4 and by the time of the transcript, it had increased to around $16.50, which is a 15% increase over nearly 5 years.
What was the speaker's initial experience with InMode stock?
-The speaker became a shareholder in 2020 and the stock performed well, becoming a four-bagger, which means it increased by 300%.
What are some of the products offered by InMode?
-InMode offers products like Define, EMPower, Evolve, Ignite, and Optimus Max, which are machines that help improve physical appearance without surgery.
What is the financial performance of InMode over the past 5 years?
-Over the past 5 years, InMode's revenue has tripled from $123 million to $416 million, and profitability has increased from $33 million to $149 million.
What is the current PE ratio of InMode and how does it compare to historical values?
-The current PE ratio of InMode is 9 times earnings, which is a significant drop from its historical range of around 20 times earnings.
What is the significance of InMode's share buyback program?
-InMode is planning to buy back approximately 10% of its shares, which is around 7.68 million shares. This is seen as a positive move as it reduces the number of shares outstanding and increases the ownership percentage for existing shareholders.
What concerns have been raised about InMode's management team?
-Critics, including the speaker and Sven Carlin, have raised concerns about InMode's management team for not utilizing their cash reserves effectively and for not initiating a share buyback or dividend program despite having a clean balance sheet and significant cash reserves.
What external factors have impacted InMode's performance?
-External factors impacting InMode include rising interest rates, which affect the cost of purchasing their machines, and geopolitical tensions in Israel, where InMode is based, which have impacted their ability to manufacture devices quickly.
What is the current sentiment of the speaker towards InMode's stock?
-The speaker is cautiously optimistic about InMode's stock. They are not actively buying more shares at the moment due to recent financial declines but are watching closely for signs of improvement to potentially increase their position.
What are the analyst expectations for InMode's future performance?
-Analysts are expecting a rebound in Q4 of the current year with a 9% revenue growth and an EPS increase from $1.91 to $2.17, indicating a return to growth.
Outlines
📈 Stock Update on InMode
The speaker discusses an update on InMode's stock, considering it an interesting time for the company. The stock has experienced significant volatility, with the speaker having been a shareholder since 2020 and having profited from it. The stock IPO'd around September 2019, and despite the company's revenue and profitability increasing significantly since then, the stock price has only risen by 15%. The speaker is considering whether it's time to buy the stock again, especially with the company's share buyback plan. InMode provides machines for non-invasive cosmetic procedures, and the speaker discusses the company's financial performance and the stock's valuation.
💹 InMode's Share Buyback and Management Criticism
The speaker talks about InMode's share buyback, which is a positive sign as it represents nearly 10% of the company. However, there has been criticism of the management team for not utilizing the company's cash reserves effectively in the past. The speaker mentions a YouTuber, Sven Carlin, who criticized InMode for not investing back into the business despite having a clean balance sheet and significant cash reserves. The company's financial performance has been good, but there are concerns about the recent lack of revenue and profit growth. The speaker also discusses how external factors such as interest rates and geopolitical conflicts may be impacting InMode's business.
📉 Decline in InMode's Growth and Future Outlook
The speaker delves into the reasons behind InMode's recent decline in growth, attributing it to factors such as rising interest rates and geopolitical conflicts in Israel. The company's management had previously downplayed the impact of these issues but later acknowledged their effects on the business. The speaker discusses the potential for a rebound in the company's performance, noting that analysts are forecasting a return to growth in the coming quarters. They also highlight the potential for dividends and further share buybacks, given the company's profitability and cash reserves.
🔍 Waiting for a Turnaround in InMode's Financials
The speaker shares their personal stance on InMode's stock, stating they are currently not buying more shares due to the recent decline in the company's financial performance. They are waiting for signs of improvement before considering further investment. The speaker presents potential scenarios for InMode's growth and profitability, even under conservative assumptions, which suggest significant upside potential for the stock. They conclude by emphasizing InMode as a stock to watch for 2025, expressing optimism that the company could recover and perform well if certain conditions align.
Mindmap
Keywords
💡Emote
💡Stock
💡IPO
💡Share Buyback
💡Revenue
💡Profitability
💡P/E Ratio
💡Interest Rates
💡Growth
💡EPS
💡Valuation
Highlights
Emote stock update discussion
Potential to buy OT stock
Emote stock's current status at $16.50
Stock performance since IPO in September 2019
Shareholder experience and stock performance over 4 years
Stock's volatility and its effect on the investor's position
Company's revenue and profitability growth over 5 years
Stock valuation and its historical PE ratio
Current PE ratio at nine times earnings
Company's clean balance sheet with no debt
Discussion on management's strategy and criticism
Recent share buyback announcement by the company
Impact of interest rates on the company's sales
Effect of geopolitical tensions on business operations
Analyst expectations for Q3 and Q4 performance
Investor's personal stance on buying the stock
Potential for dividends and share buybacks
Emote stock as a must-watch for 2025
Transcripts
so today I thought do an update on emote
stock and when I could potentially go
buy OT stock because right now I think
is a quite an interesting time for the
company and it could be right now where
the stock is probably going to be make
or break it could be very successful or
we could start seeing the crack starting
to appear in this stock so thought i'
give you an update especially what's
going on with the chair buyback if you
could hit the like button if you're new
around here and you find this video
helpful subscribe we're so close to
6,000 subscribers and I said when we get
there I'll do a live Q&A session on the
main Channel on YouTube for you guys on
a Sunday so anyway let's get tock on to
in mode so in mode ticket symbol inmd is
currently a
$16.50 stock and it's had a very bumpy
ride a volel ride it's had its highs and
it's had its lows and that's what we're
going to cover today but also is it time
to start buying the stock again now you
can see the stock ipoed around September
2019 and I actually came a shareholder
of this business in 2020 so I've
actually been a shareholder for about 4
years in this business and the stock
actually did really well for me it was a
stock that actually came a four bagger
it did very well I think we were taking
profit on this business uh that was up
like 300% and I actually remember at the
time people were saying why are you
selling in mode and I was like you know
it's a good stock but you know I just
don't know if it's run up a little bit
too much and I did take some profit off
the table and it need really well but I
still held some some shares and uh the
stock came back down to reality now for
for a long time I was actually still up
over 100% on that stock until around
about 2023 and then the stock actually
did start falling down a fair amount and
in the last kind of 12 months and I
actually say more than 18 months I
actually started averaging into my
position and the stock is actually
continue to go lower and lower and lower
and I'm actually down on my position now
from averaging up I'm down around about
30% on in mode now I'm going to talk
about where I'm at with it is it time to
sell the stock am I going to be buying
the stock and everything like that today
so hope the video is useful now the
stock or the company itself in mode
provide a lot of these machines you can
see some of these machines here like
Define for example EMP power evolve
ignite Optimus Max which is the brand
new one which hopefully elevates sales
going forward as well with some new
progress on the technology base made
from them and what a lot of these
machines do is they help appearances
without having to go under the knife so
quite often if you wanted something
change with your appearance you'd go
under your knife obviously you'd be H
probably not going out for the next kind
of couple of days weeks it would take up
your all day you would have to be put to
sleep whereas this is more like in
andout treatment so you'd go in get the
surgery done and then obviously you
could go on with your you know
day-to-day job whatever that might be so
for example one of the ones here is the
defined cheek and Define chin so you can
see before photo and an after photo and
obviously good progress there and you
can see once again a bit of a one on the
chin and neck here one on the arm as you
can see here so these machines have
proven to work and they're very
successful machines and obviously people
are more aware about their appearance
now especially with the rise of social
media so it's a space that should
continue to grow in the next kind of few
years and when you look at the stock
itself you know the stock has gone from
where it ipoed from $4 back in 2019 to
nearly 5 years later and actually it's
nearly 5 years to the date tomorrow from
the IPO and it's h 15% up in that time
frame so yeah obviously it's not done
much since the IPO stage but if you do
look at a financial point of view and we
go from the IPO the company was doing
about 123 million in Revenue the company
now does
416 million in revenue and from a profit
point of view the company used to do 33
million in profitability and they're
currently doing 149 million in
profitability so yeah the profitability
has nearly fived extra in that time
frame and the revenue has also tripled
since that time frame yet you look at
the stock and it's only up 15% and
that's where it gets interesting because
you're like 5 years of progress and
financially the 5 years of very good
progress you know I think nearly every
company would like these s these sort of
figures and yet the stock hasn't really
reflected that all and as you see here
clearly from the business the revenue
has done very well and look at the
amount of profitability many many
businesses wish they had the profit
margins of 30 plus% profit margins and
if we have a look at what the P used to
trade at it's historically a very low PE
lowest it's ever been um it used to
trade in the 20 range even back in 2023
it was close to just a sub 20 times
earnings but right now the valuation has
totally collapsed to nine times earnings
so what's going on because obviously
what I've shown you so far is a company
that is doing very well it's also got a
clean balance sheet as you look here
there's no debt on the balance sheet
very healthy amounts of cash on the
balance sheet at the moment nearly half
the market cap in cash what has gone
wrong why is this company ipoed 5 years
ago and the share price hasn't really
done anything thing yet the financials
have trebled and quadrupled since that
time frame well mostly it goes to
management team and once again it kind
of goes to how much is it to blame from
the management team or how much has it
been external factors that has really
affected the business so when we look at
the company right now the're buying back
shares which is a positive the company
is currently going to buy around about
7.68 Million worth of shares which is
nearly 10% of the company buying back
10% of the company is very very good the
shares outstanding is going to come down
massively you if you own the stock as a
shareholder are going to own more of the
business which is great also from a
profit metric EPS as well metric that's
going to look very good even right now
as we'll get onto the financials in a
second but the profitability is dropping
slightly the EPS is going to be nearly
neutralized with the share buyback and
obviously that's really good so why have
I put that in a negative well the big
criticism that in mode had for many many
years and I'm not talking since the
recent drop it had it for the last four
years is um likes value with Sven Carlin
Sven um good YouTuber good investor um
covered it on his YouTube channel and
this is the most viewed video on in mode
on the whole YouTube scene uh obviously
238k subscriber Channel massive
influence uh on the stock market retail
investors YouTube YouTube investors and
uh it got 25k views and two years ago he
basically came out and said I think that
he said it was an amazing he said in
mode has it all but he said can't invest
because of risks H recent one of them
was a recent IPO which obviously isn't a
Rec recent IPO now cuz it's um you know
5% since that time frame bling is no
dividend no share buyback the he his big
criticism is they they sit on all this
cash and they don't do anything with it
and personally for me I've critic
criticized them as well I've come on
YouTube and I I've actually criticized
and gone why are you not spending your
cash balance you know as we just shown
here they had a clean balance sheet they
s they were sitting on so much heal cash
balances it just kept going up and up
and up where there were kind of you know
nearly 729 million of cash which is just
insane and every year the company is
going to be throwing off extortionate
amounts of cash of you know 144 million
use that cash to you know buy do
something with it and in mode manag team
kept com come out and saying we might
buy a company so we need it we need a
you know we might buy a company and they
kept refusing to do it and you had
people like Sven Carin and even me I was
getting bit like are these numbers legit
because before they had the dip in the
financials currently going on everybody
was saying is in mode legit with these
numbers so good and then everyone was
kind of getting annoyed as the shares
kept going down more and more and more
and then eventually even though the
management team said they don't believe
in share BuyBacks they came out with a
share buyback they did one share buyback
and only in the last few days they've
announced another share buyback and
you're looking and thinking how come
there's a sudden change in management
where they weren't using the cash and
now they started using the cash don't
get me wrong it's great and all these
kind of concerns that it weren't legit
is clearly showing that actually it
probably was legit and is it a master
plan now by the you know the management
team that they're able to do all these
share BuyBacks when the stock is at
historic close is it a master plan that
they've done it to Perfection and uh
they're buying the stocks at the perfect
levels was this all in you know where
management had it all under control all
this time or why was this strange share
buyback starting to happen so this was
always one concern with IM mode and it's
kind of gone out the way and if if
anything this is actually a major
positive now that they're buying back so
much amount of stock and what um I would
love Spen Callin to actually do an
updated video on this and because
obviously that was his big concern and
now obviously that that kind of big
concern has kind of gone but one big
major reason reason why the stock is
down is because OB what you have if
you're going to have a successful
business what do you need to have you
need to have profit growth and revenue
growth and what's happened within mode
in the last 12 months they haven't had
that so so maybe everyone's gone a bit
shortterm but there is some impact
because of the poor numbers and and they
have had poor numbers and they're
missing and this was never like IM Mod's
management team they always uh
overachieved and right now they're
missing and they're actually missing by
a fair amount you know 20 million is no
small Miss H and that says that you've
lost the control of the numbers a little
bit and then need to regain control of
the numbers and there's big cuts in the
guidance which you don't want to see so
there's been poor numbers and when you
look at the growth point of view you
know you can see historically pack from
obviously the co dip that happened uh
when they couldn't sell any of these
machines the growth was very very good
and then as soon as we got into like
middle of 2023 boom it just fell off and
it's just got worse and worse and even
the last quarter was actually the worst
quarter so far and that's obviously
what's caused in mode to have a bit of a
dip now obviously as you look here the
profitability is declining the revenue
is declining which isn't good but you do
look it in the context and you go that's
still a lot of Revenue that's still a
lot of profitability but it's still not
good and when we dig in so why was this
company historically doing so good and
then all of a sudden in mid 2023 it's
fall off a cliff well it's falling off a
cliff because of a couple reasons uh
that we have the interest rates so you
can see here basically since you know
mid 2022 the interest rates especially
got a lot higher so when they were
selling these machines these machines
were getting sold for let's say um
400k every time that a lot of these
doctors were buying these machines for
400k getting them on 2 3% interest rates
is okay getting them on what they went
to which was I think management was
saying like 12%
interest rates that's quite a lot and
that's why so many people have kind of
gone I don't know if I want to order it
those S of interest rates and I'm going
to wait for it to go lower so a part of
what's probably affecting the mode is
the interest rates at the moment the
other thing that's probably if affecting
them at the moment is the hamus uh
terrorist attack that happened on Israel
um I'm not going to go too far into it
because I know this is quite a sensitive
subject but obviously um Hamas Palestine
and Israel have there's a lot of you
know War situation going on there at the
moment and IMM mode is an israel-based
business they came out and they
basically said we are not going to be
impacted by this war situation and then
in the most recent quarters they've
actually come out and said actually we
are getting impacted by this situation
uh and we aren't able to build the
devices as quick as what we were doing
at because of this situation so once
again there's been a few remarks by
management that have been like shared by
back no share by back actually we're
doing a share by back there's been you
know a bit of Mis Management on the
numbers there's been management that
said yeah we're going to have no impacts
and then they do have impacts so
management have kind of lost the grip a
little bit at the moment with what's
kind of going on now is this a blip is
this a blip because of the interest
rates and the war situation and the
economic slowdown no the economy is not
doing so well people aren't going to go
out and maybe go buy these treatments
that cost you know fre 4,000 at the
moment they can't afford the higher
interest rate payments on these people
are pulling back the spending the middle
class are pulling back the spending and
maybe not going for the three 3,000
4,000 treatments the interest rates on
top maybe that's what's going on and
it's a blip or maybe it's something a
lot worse and maybe in mode has just
fallen off the cliff we don't really
know looking at analyst numbers you know
analyst numbers are expecting a poor
quarter this year H sorry the next
quarter Q3 to be poor but actually in Q4
they're actually expecting a rebound of
n % Revenue growth and this year they're
actually expecting only 13% negative
growth and they say that this trend will
break H because there was a lot of
orders that didn't fall in that quarter
and then we we'll recover from there
we'll see what happens but I mean if
immo get anywhere close to what the
actually analy are forecasting they're
forecasting the EPS to go back from $191
to $217 they're expecting sales growth
to come back because obviously hopefully
the econom is in a bit better place
interest rates are going to obviously uh
can hopefully we see cut start coming in
and maybe that gets people ordering the
machines again at least are quite
bullish on the return of growth here now
the big thing is are they you know we've
seen management team before are they
kind of smoker mirrors or is it the
truth is in mode going to bounce back
and for me that's what I'm waiting for
because right now we have the trend of
it's getting worse and worse I've got to
see a rebound and I've got to see
management deliver on the rebound of
growth and if they do hit these numbers
I think the stock will fly but my big
thing is is are they going to get there
I don't know and I want to see proof
that they can do these numbers now
normally they bring out the Q3
preliminary results on 12 of August uh
12th of October which is actually a
month today and when they bring out the
preliminary report for 2024 we're going
to get the Guide we're going to see what
numbers they've done and if they have
the numbers finally under control like
they haven't done previously and we're
going to see the guide for Q4 and we'll
see if the Q4 guide is right because by
then um we'll get to see how these
numbers are doing do do they think that
they can get to that growth of 9% and
obviously as well in the Q4 guide we'll
then get the guidance for you know the
whole year of 2025 and I'll be able to
judge management team and see actually
they've finally got this under control
and the interest rates coming down are
going to help them or is there more
going on here because if this doesn't
improve then I'm like that's a little
bit concerning but right now I believe
that it's just this in interest rate
environment the war situation and maybe
it does start recovering because at the
end day this company doesn't need much
to recover you know unless you're
expecting like 6% growth um next year
and over 10% growth on the EPS this
company when it's doing these levels of
profitability it doesn't need much to
fly and when it's trading at like nine
times earnings and it's buying back 10%
of its market cap this company doesn't
need much to go right to do well from
here this sort of valuation and with
this profitability people think a lack
of growth is a you know gone but
realistically this company I mean look
at analyst analytic expecting you know
that really big return to growth here
and they don't even need to do that to
do quite well and I'll show you this
I'll show you some numbers here because
I think people don't actually realize
like how easy it could be for them to
actually do really well so I've done
some numbers here where we've got 2% 4%
6% Revenue growth and we've got 30 32
34% profit margins they have even
potential to probably expand those
profit margins and if you look here
total earnings point of view I put 20
times earnings in I tried to be fair I
mean you could put a lower earning
multiple in but I think 20 times
earnings for this amount of
profitability and growth would be okay
but I mean just look at the numbers that
are coming out guys you know this is on
2% growth I've not even gone Ultra
bullish and you're getting quite a fair
amount of upside I mean
realistically even if they didn't trade
at 20 times earnings let's put 10 times
earnings
in the company still at 10 times
earnings would do okay and the thing is
I put I've put a um a 100 million share
buyback but they're still going to be
making what did we say here um
180 144 million of profitability a
year I mean the potential for dividends
in in share BuyBacks alone is very good
so you looking at this here thinking
there doesn't need much to go
right but does it go right and we have
to wait and see in my opinion I'm I'm
personally right now I'm not actively
buying because what I've seen is just
the financials get worse in the last 12
months and I've gone I can't buy why
thei while the financials get worse but
if I do see the financials start
recovering and I see that okay this was
probably a blip with what happened with
the wall situation with what happened
with the interest rate environment and
then I look at the valuation and
potentially they don't even they only
need to grow like 1 2% a year and this
would do very well never mind if what
analysts are saying that they expect 6 s
8% growth if they get to them sort
levels I mean it will it will actually
do really well so I'm a buy in not at
the moment not at the moment because the
financials aren't improving but if I
start seeing signs that the Improvement
is there I will be buying this stock
because I think this could turn around
very very quickly um at this sort of
valuation I've just got to wait and see
now a few people might say well if I
wait and see I might miss out on the
jump and that is kind of true but saying
that I'd rather be 100% sure and as well
as that there's plenty of times where
I've sat on like him and hairs when it
was
$3 and it was bringing out 10 out of 10
earnings and it used to take like 12
months for the market to go actually
yeah this is really good we should start
buying it you know I was in DraftKings
at 10 at $10 and it used to drop 20% off
earnings that were 10 out of 10 and then
eventually 12 months later the market
went after another fall quarters of
earnings actually went okay we'll
probably start buying this one now so
it's never 100% there and even if it
does rally let's say 10% 20% even 30%
from here it's still probably quite
undervalued if it can do the numbers
that we're showing with even you know
limited growth and the profitability
that it's showing So within mode I
actually think this is a must watch
stock for 2025 because if this does what
it could potentially do I think um we'll
be looking back in a couple years and
going $16 what a steal that was so we'll
see what happens there's a few things
that still needs to turn around but I
still own shares and I'm I'm at no place
at giving up on this stock and if
anything I'm I'm watching and to start
pulling the trigger and buying more and
if it does go to plan I could easily
double my position from here in in mode
and we'll see what happens there so hope
you enjoyed the video update on immo
guys um if you could hit the like button
like I said if you're new around here
subscribe um if you watch all the time
and you're still not subscribed you
definitely subscribe apart from that
I'll see you on uh Friday guys
[Music]
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