InMode (INMD) has introduced a new US$ share repurchase program, authorizing the buyback of up to 6,380,000 shares, or about 10% of its outstanding stock, using available cash.
See our latest analysis for InMode.
The buyback news comes after a mixed stretch for investors, with a 1-day share price return of 6.11% and a 7-day share price return of 2.34% contrasting with a year-to-date share price return decline of 8.51% and a 1-year total shareholder return decline of 26.05%. This suggests that recent momentum has picked up even as longer term performance remains weak.
If this buyback has you reassessing opportunities in medical technology, it could be worth scanning other healthcare names using our screener of 33 healthcare AI stocks as potential ideas to research next.
With the stock down on a 1 year view, but trading below some analyst price targets and launching a sizeable buyback, is InMode quietly undervalued here, or is the market already pricing in its next chapter of growth?
Most Popular Narrative: 9.7% Undervalued
With InMode last closing at $13.54 and the most followed narrative putting fair value at $15.00, the buyback sits against a thesis that still sees some upside.
The bearish analysts expect earnings to reach $82.6 million (and earnings per share of $1.27) by about September 2028, down from $178.7 million today. The analysts are largely in agreement about this estimate.
Curious how a thesis built on shrinking earnings, slower revenue and lower margins can still justify a higher valuation anchor than today’s price? The key is how far profitability is expected to compress, what kind of P/E multiple the narrative assumes InMode could still support, and how those cash flows are discounted back using a 9.48% rate. The tension between cautious growth assumptions and that future earnings multiple is what really drives the $15.00 fair value call.
Result: Fair Value of $15.00 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still clear swing factors, with international expansion and new platforms like OptimasMAX or Envision potentially supporting revenue resilience and margin stability.
Find out about the key risks to this InMode narrative.
Another View: Cash Flows Point a Different Way
While the $15.00 fair value narrative suggests InMode is 9.7% undervalued, our DCF model points to a different conclusion. On that cash flow view, fair value is $10.12. With the current $13.54 share price above that level, there is less margin for error if earnings soften further.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out InMode for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Does this mix of signals make you cautious or curious? If you want to move quickly and ground your own view in the numbers, it helps to weigh both sides through 3 key rewards and 2 important warning signs.
Ready to hunt for your next idea?
If this InMode update has sharpened your focus, do not stop here. Use the Simply Wall St screener to surface fresh ideas that match your style.
- Target value opportunities that combine quality and pricing power by scanning our list of 48 high quality undervalued stocks that might suit a more disciplined approach.
- Prioritise stability and capital strength, and filter for companies in our solid balance sheet and fundamentals stocks screener (42 results) that could help anchor a more resilient portfolio.
- Get ahead of the crowd by checking a curated screener containing 26 high quality undiscovered gems that might not yet be widely followed but still pass key fundamental checks.
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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