INMD reports

INMD beat by .07 (.46 vs .39 consensus) revenues us 63% yoy 47M vs est of 42.48M. International revenue up 71% yoy. Gross margins up 87% vs 86% yoy. FY 20 guidance $185-1.93 vs 1.70 consensus and revenues 190-198 M vs 191.21M consensus. First look looks great.



The quarters numbers look good. Their revenue increase 64% YoY on Quarterly basis and their Full year revenue increased 56%. I do not know yet how much the seasonality affects their earnings but on the face of it, they seem to be growing faster. However I did not like their forecast for the upcoming fiscal year. They are expecting a FY2020 revenue of 190 - 198 MM which would be an increase of 22% at the low end and 27% at the high end. Even if we assume they will hit their high number, it’s still a considerable slow down.

The good part is the company is profitable and cash flow positive. So there will be some downside protection. I believe forecast may be the cause of share price going down after a significant beat. Again I have no way to tell if the management is sandbagging their forecast. Given what I know about the forecast, I am not impressed and ended up selling my shares. I believe the shares may be fully priced at this point and if the economy suffers for any reason there may be some more downside give that this would be considered non-essential service.

I may be completely wrong but this is what I thought and did. Thought I will share.

Thanks -