Investors should take note of NASDAQ:INMD, a growth stock that remains attractively priced.

Last update: Oct 13, 2023

INMODE LTD (NASDAQ:INMD) was identified as an affordable growth stock by our stock screener. NASDAQ:INMD is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Evaluating Growth: NASDAQ:INMD

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:INMD has achieved a 8 out of 10:

The Earnings Per Share has grown by an impressive 22.94% over the past year.
Measured over the past years, INMD shows a very strong growth in Earnings Per Share. The EPS has been growing by 48.72% on average per year.
Looking at the last year, INMD shows a very strong growth in Revenue. The Revenue has grown by 22.95%.
The Revenue has been growing by 53.39% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 13.36% on average over the next years. This is quite good.
The Revenue is expected to grow by 16.34% on average over the next years. This is quite good.

Assessing Valuation Metrics for NASDAQ:INMD

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:INMD was assigned a score of 9 for valuation:

A Price/Earnings ratio of 8.36 indicates a reasonable valuation of INMD.
Based on the Price/Earnings ratio, INMD is valued cheaply inside the industry as 98.03% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.71. INMD is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.21, which indicates a rather cheap valuation of INMD.
99.51% of the companies in the same industry are more expensive than INMD, based on the Price/Forward Earnings ratio.
INMD is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.80, which is the current average of the S&P500 Index.
98.52% of the companies in the same industry are more expensive than INMD, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, INMD is valued cheaper than 98.52% of the companies in the same industry.
INMD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
INMD has an outstanding profitability rating, which may justify a higher PE ratio.
INMD's earnings are expected to grow with 13.36% in the coming years. This may justify a more expensive valuation.

Analyzing Health Metrics

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:INMD has received a 8 out of 10:

There is no outstanding debt for INMD. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
A Current Ratio of 11.84 indicates that INMD has no problem at all paying its short term obligations.
INMD has a better Current ratio (11.84) than 93.60% of its industry peers.
INMD has a Quick Ratio of 11.21. This indicates that INMD is financially healthy and has no problem in meeting its short term obligations.
INMD has a better Quick ratio (11.21) than 93.10% of its industry peers.

Assessing Profitability for NASDAQ:INMD

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:INMD has earned a 9 out of 10:

INMD's Return On Assets of 24.89% is amongst the best of the industry. INMD outperforms 98.52% of its industry peers.
INMD has a better Return On Equity (27.43%) than 98.03% of its industry peers.
With an excellent Return On Invested Capital value of 28.04%, INMD belongs to the best of the industry, outperforming 99.51% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for INMD is significantly above the industry average of 8.56%.
INMD has a Profit Margin of 36.77%. This is amongst the best in the industry. INMD outperforms 98.52% of its industry peers.
In the last couple of years the Profit Margin of INMD has grown nicely.
INMD has a better Operating Margin (42.59%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of INMD has grown nicely.
INMD has a better Gross Margin (83.89%) than 96.06% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of INMD

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.