As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it might be a deeply undervalued gem.
The stock this week is:
Inmode Ltd (INMD)
Inmode Ltd is a medical device company focused on developing innovative, minimally-invasive technologies for aesthetic treatments. From body contouring to skin rejuvenation, Inmode’s platforms are popular among plastic surgeons, dermatologists, and cosmetic physicians. The firm’s blend of recurring revenue from device usage and expanding global presence has made it a standout in the niche of energy-based aesthetic solutions.
What is IV/P (Intrinsic Value to Price)?
IV/P tells you how much value you’re getting relative to the stock’s price. If it’s greater than 1, the stock might be trading at a discount. If it’s much greater than 1 — it might be a deep value opportunity.
IV/P for Inmode Ltd: 2.7
Inmode currently has an IV/P of 2.7, suggesting its intrinsic value is estimated at 2.7 times its current share price. That means:
For every $1 you invest, you’re potentially getting $2.70 of value.
That’s a significant margin of safety — and a compelling signal for bargain hunters.
Supporting Metrics:
- Free Cash Flow Yield: 12.2%
A double-digit FCF yield underscores Inmode’s ability to generate serious cash relative to its market cap. - Shareholder Yield: 38.21%
Nearly 40% return of capital — largely through aggressive buybacks — is highly attractive in today’s market. - Return on Assets (5-Year Average): 15.62%
A strong and consistent measure of profitability that’s well above market averages.
Why Might Inmode Be Undervalued?
Small Cap with Big Returns
At a market cap just above $1 billion, Inmode can fly under the radar of large institutional investors — despite its impressive returns on capital and free cash flow.
Cosmetic Procedure Bias
Some investors view aesthetic treatments as a “nice-to-have” sector, making the business seem less defensive. But Inmode’s steady operating income and capital-light model tell a different story.
Post-COVID Demand Normalization Misperception
Investors may be mispricing Inmode due to the assumption that its strong growth during the pandemic (when aesthetic procedures surged) was a one-time phenomenon. However, Inmode’s recurring revenue model and international expansion suggest that demand for minimally invasive cosmetic treatments remains strong — and growing.
Conclusion:
With an IV/P of 2.7, Inmode Ltd (INMD) appears to be trading at a meaningful discount to its intrinsic value. Its combination of high free cash flow yield, exceptional shareholder returns, and solid profitability makes it a compelling opportunity for value-focused investors. While the aesthetic industry may not carry the same glamour as tech or AI, Inmode’s fundamentals speak volumes — for those willing to look past the surface.
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One Comment on “Inmode Ltd (INMD): Is This Deeply Undervalued Stock a Hidden Gem?”
Other reasons for “undervaluation”: 1. Israeli based company. 2. Recently removed from S&P 3000. 3. Doma Capital pushing to remove CEO and CEO pushing back (Sound familiar?). 4. Miss on the last two quarter analyst estimates.