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InMode (INMD) to Post Q1 Earnings: What's in the Offing?

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InMode Ltd. (INMD - Free Report) is set to report first-quarter 2020 results on May 6, before market open.

In the last reported quarter, the company posted a positive earnings surprise of 17.9%. Notably, in the third quarter of 2019, it posted the first quarterly results as a public company since its IPO in August 2019.

Let’s take a look at how things have shaped up for the fourth quarter and 2019 results.

Factors at Play

The company during its fourth-quarter 2019 earnings call had considered that the sales in China and the other neighbouring countries will be affected by the coronavirus pandemic in the first quarter 2020. However, it also stated that the economic havoc created by this crisis is not likely to affect the company in a massive way in the quarter. InMode’s business in the Asia-Pacific region (the initial epicentre of the pandemic) accounts for a small portion of total revenues, which possibly brought about minimal top-line disruption in the first quarter.

InMode Ltd. Price and EPS Surprise


InMode Ltd. Price and EPS Surprise

InMode Ltd. price-eps-surprise | InMode Ltd. Quote

However, InMode’s manufacturing capabilities are likely to have been impacted in the first quarter of 2020 because some if its components are manufactured in China, where factories have not returned to full production. The company, during its fourth-quarter earnings call, had noted about its efforts to explore other sources for those components in countries in Europe and elsewhere. However, the extent these efforts worked to address the concern is not yet clear.

Meanwhile, InMode’s Evolve platform, which is the first hand-free platform with three treatment modality, has been well received by customers in the United States. It has been cleared for sale in Canada as well as Europe, thus paving the way for wider customer adoption. Hence, InMode expects a revenue uptick on the platform’s robust performance.

The company’s other platform, Evoke — a non-invasive solution for facial remodeling — was approved by the FDA in January and certified by Health Canada in February. Notably, this platform was also approved for marketing and sales in Europe following the receipt of the CE mark. This is expected to result in wider customer adoption, thus boosting revenues.

InMode is optimistic about the continued customer adoption of its brands, namely, BodyTite, FaceTite, NeckTite, AccuTite and Morpheus8. Gains from the popularity of its brands, based on worldwide system sales, are expected to get reflected on first-quarter results in the form of a revenue uptick.

InMode’s Bipolar RF technology has been performing quite well over the past few quarters, backed by rising customer adoption of the minimally-invasive technology. This momentum is expected to have been maintained in the first quarter.

Q1 Guidance

Given the worldwide business disruptions and economic impact, InMode has provided some relief in the form of its first-quarter guidance released as part of its COVID-related business update on Mar 23. Per the company, till Mar 23, InMode's first-quarter 2020 revenues from devices and consumables were within expectations.

Based on the company's strong position for continued growth once the COVID-19 subsides and lack of visibility for the coming months, management has decided not to adjust its 2020 guidance.

The Estimate Picture

The Zacks Consensus Estimate for first-quarter total revenues and earnings per share is pegged at $35.9 million and 31 cents, respectively.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has good chances of beating estimates. However, this is not the case here as you can see:

Zacks Rank: The company currently carries a Zacks Rank #3.

Earnings ESP: InMode has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Exact Sciences Corporation (EXAS - Free Report) currently carries a Zacks Rank of 2 and has an Earnings ESP of +2.28%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aphria Inc. (APHA - Free Report) , carrying a Zacks Rank of 2 at present, has an Earnings ESP of +35.71%.

Omeros Corporation (OMER - Free Report) is a Zacks #2 Ranked stock with an Earnings ESP of +10.00%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Omeros Corporation (OMER) - free report >>

Exact Sciences Corporation (EXAS) - free report >>

Aphria Inc. (APHA) - free report >>

InMode Ltd. (INMD) - free report >>