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 products, meets key criteria from Peter Lynch’s investment strategy, combining solid growth, strong profitability, and an attractive valuation.

Why INMD Fits the GARP Approach

• Sustainable Growth: INMD has delivered a 5-year EPS growth rate of 22.97%, comfortably within Lynch’s preferred range of 15-30%. This indicates steady, manageable expansion rather than overheated growth.
• Undervalued Relative to Growth: The stock’s PEG ratio (0.37) is well below 1, suggesting it is priced attractively relative to its earnings growth.
• Strong Profitability: With a return on equity (ROE) of 28.38%, INMD ranks in the top tier of its industry, reflecting efficient use of shareholder capital.
• Healthy Balance Sheet: The company carries no debt (Debt/Equity = 0) and maintains a robust current ratio of 8.73, ensuring ample liquidity to meet short-term obligations.

Fundamental Highlights

INMD’s financial health is rated highly, scoring 7 out of 10 in our fundamental analysis. Key strengths include:

• Profitability: A 44.80% net margin places it ahead of 98% of peers in the Health Care Equipment & Supplies sector.
• Valuation: Trading at a P/E of 8.53, INMD appears significantly undervalued compared to both industry averages and the S&P 500.
• Cash Flow: Consistent positive operating cash flow over the past five years underscores financial stability.

For a deeper dive, review the full fundamental report on INMD.

Our Peter Lynch Strategy screener lists more stocks that align with this strategy and is updated regularly.

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.