Is Now The Time To Look At Buying InMode Ltd. (NASDAQ:INMD)?

While InMode Ltd. (NASDAQ:INMD) might not have the largest market cap around , it saw a decent share price growth of 15% on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine InMode’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

We've discovered 2 warning signs about InMode. View them for free.

What's The Opportunity In InMode?

Good news, investors! InMode is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $22.41, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, InMode’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Check out our latest analysis for InMode

What does the future of InMode look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -16% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for InMode. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although INMD is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to INMD, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on INMD for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 2 warning signs for InMode you should be aware of.

If you are no longer interested in InMode, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.