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Fairview HK: Although sales are no longer rising, this company remains profitable
InMode Ltd. (INMD) is a medical device firm that offers a variety of therapies to aid with skin contouring, acne treatment, hair removal and other cosmetic difficulties. The company's mission is to provide young people with an alternative to cosmetic
Shares of the healthcare stock have been improving in recent months, but they are still down approximately 50% year to date. Is the stock set to continue rising, or will it give up some of its recent gains?
INMD works in a sector of healthcare – aesthetics – that is proving to be resilient in the face of inflation; in its most recent quarter (ending Sept. 30), the firm recorded sales of $121.1 million, a 29% increase year over year. Revenue has recently been consistent, however, investors may be concerned about the sharp drop-off from the company's 70% increase in sales in 2021.
A slower growth rate is hardly surprising, especially with a possible recession on the horizon and customers becoming more price-conscious. However, attaining a 29% increase on top of already great outcomes is still commendable.
The business anticipates sales of $445 million to $450 million for the whole year. Its revenues were around $358 million last year. What makes the company so appealing is that it earns extremely high margins and has lots of ability to absorb growing prices.
Strong margins and steady sales growth are a winning combination that might make the stock appear like a steal in the future.
Investors may be concerned about whether it is too late to purchase INMD stock. Shares have been rising for many months and are no longer trading at their 52-week low of $20.60. Investors may be disappointed that the bottom has passed but the company is far from expensive; the price-to-earnings (P/E) ratio of 17 is roughly where it was prior to the pandemic. This is also significantly lower than the healthcare average of 22.
There's a lot to appreciate about INMD's business and worldwide reach, as there's obviously great potential for the company to continue extending its operations in the long run. INMD might appear extraordinarily inexpensive in a few years, given its growth possibilities and great profit margins. Long-term investors may easily justify purchasing shares of the healthcare firm now.
Fairview HK Limited is one of the foremost privately owned Asia-Pacific orientated, boutique wealth management firms in Hong Kong. We offer our services to a selected group of families, family offices, institutions and fund managers, you may visit our website https://fairviewhk.com/