Here's What Analysts Are Forecasting For InMode Ltd. (NASDAQ:INMD) Following Its Earnings Miss

InMode Ltd. (NASDAQ:INMD) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$86m missed by 19%, and statutory earnings per share of US$0.28 fell short of forecasts by 22%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for InMode

Taking into account the latest results, the current consensus from InMode's six analysts is for revenues of US$428.3m in 2024. This would reflect an okay 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 3.7% to US$1.70 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$456.9m and earnings per share (EPS) of US$1.80 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of US$21.00, suggesting the downgrades are not expected to have a long-term impact on InMode's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on InMode, with the most bullish analyst valuing it at US$29.00 and the most bearish at US$16.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that InMode's revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2024 being well below the historical 26% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that InMode is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for InMode going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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