INMODE LTD (NASDAQ:INMD) – A Strong Candidate for GARP Investors

INMODE LTD (NASDAQ:INMD) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, which specializes in minimally invasive aesthetic medical technology, meets key criteria from Peter Lynch’s investment strategy, combining solid growth, strong profitability, and an attractive valuation.

Why INMD Fits the GARP Approach

• Strong Earnings Growth: INMD has delivered a 5-year average EPS growth of 22.97%, well within Lynch’s preferred range of 15-30%. This indicates sustainable expansion without excessive risk.
• Attractive Valuation: With a PEG ratio of just 0.35 (far below Lynch’s threshold of 1), the stock is priced favorably relative to its growth prospects. The P/E ratio of 8.04 also suggests undervaluation compared to industry peers.
• Healthy Financials: The company carries no debt (Debt/Equity of 0) and boasts a robust current ratio of 8.73, reflecting ample liquidity to meet short-term obligations.
• High Profitability: INMD’s Return on Equity (ROE) of 28.38% and strong profit margins (44.80%) place it among the top performers in its sector.

Fundamental Highlights

Our full fundamental report rates INMD highly, noting its excellent profitability, financial health, and reasonable valuation. Key strengths include industry-leading margins and efficient capital allocation, though recent declines in revenue and EPS growth warrant further scrutiny.

For investors looking for similar opportunities, our Peter Lynch Strategy screener provides a curated list of stocks meeting these criteria.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.