For quite some time, InMode (NASDAQ:INMD) had something of a hot streak going on with analyst ratings. However, this might start changing after an analyst downgraded it from Buy to Hold. The move hit the stock hard, as it’s down substantially in Friday afternoon trading.
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The analyst in question, Needham’s Michael Matson, pivoted from Buy to Hold following InMode’s latest earnings report. Interestingly, InMode presented an impressive earnings report featuring $133.6 million in revenue for the December quarter. However, the growth rate started to slow, with just about 21% year-over-year growth compared to roughly 30% year-over-year growth in 2022’s first three quarters. Moreover, InMode’s full-year figures didn’t mesh with expectations either. EPS figures turned out to be a miss for the full year, coming in 6.4% lower than expected.
Matson noted that consumers were cutting back on aesthetics procedures, which is where InMode’s primary focus is, stating that InMode’s reduced growth rate came right at about the time studies showed that consumers were dialing back. Indeed, similar uncertainty cropped up for a company in the same field, Medpace Holdings (NASDAQ:MEDP). This suggests a certain amount of trouble ahead for the entire sector.
Despite this, however, Wall Street is still strongly in support of InMode. Analyst consensus calls InMode stock a Strong Buy. Plus, it has 36.78% upside potential thanks to its average price target of $51.25 per share.
