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 devices, 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 Historical Growth: INMD has delivered an impressive 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 0.33 (far below Lynch’s threshold of 1), the stock is priced favorably relative to its growth. The P/E ratio of 7.59 also suggests undervaluation compared to industry peers.
• Healthy Financials: The company has no debt (Debt/Equity = 0) and a robust current ratio of 8.73, reflecting strong liquidity and financial stability.
• High Profitability: INMD’s return on equity (ROE) of 28.38% exceeds Lynch’s 15% benchmark, highlighting efficient use of shareholder capital.

Fundamental Strengths

Our fundamental analysis report rates INMD highly, noting its exceptional profitability, debt-free balance sheet, and undervaluation relative to the sector. While recent revenue and EPS growth have slowed, the company’s long-term track record and strong margins (80% gross margin) support its competitive position.

For more stocks matching the Peter Lynch strategy, explore our Peter Lynch screener, updated daily.

Disclaimer

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