No. of Recommendations: 8
Hi Fools!

Breathing some life into this board given that it's a new decade and all. :-)

I recently posted a thread on Twitter about InMode, a recent IPO. I've pasted it below or you can take a look on Twitter:

Surprised that InMode (INMD) hasn't gotten more attention. What am I missing?

InMode develops minimally-invasive medical products... everything from liposuction to wrinkle reduction, skin rejuvantion, hair removal, & more. It fills the gap between lasers and plastic surgery.

InMode's secret sauce is its radiofrequency technology. The technology enables face and body contouring without the scars that come from surgery. Patients get 90% of the results they'd get from a plastic surgery.... without the surgery, scars, and recovery time.

The company's launched six product platforms since 2010 and has multiple patents, the oldest of which expires in 12 years. InMode has an installed base of 4,400 systems worldwide, with a target market of surgically-trained physicians (100k+ in the U.S. and 200k+ globally).

Any product InMode develops needs a gross margin of 85%+.

Once a system is sold, it opens the door for repeat consumables sales (still unclear what % of revenue this is today) as well as new/additional platforms InMode develops. InMode aims to develop two new platforms annually.

Right now 80% of revenue comes from the U.S. and 20% internationally. Management expects this to move to 50/50 in the coming years.

InMode already sells to 49 countries today, and is awaiting regulatory approval in countries like China, Brazil, Korea, and Taiwan.

InMode is based in Israel, co-founded by Moshe Mizrahy (now chairman and CEO) and Dr. Michael Kreindel (now CTO). Mizrahy owns 18.7% and Kreindel owns 16% of the company. Healthy skin in the game.

InMode has significant "Approved Enterprise" tax advantages in Israel, for now.

Numbers look promising:

Revenue: $138M (up 57.4%)
Gross margin: 86.9%
Operating margin: 36.9%
Free cash flow: $43.6M
$165.3M in net cash

Extremely profitable, quickly-growing biz that's trading for 34x earnings and 33x free cash flow. Seems reasonable.

Biggest risks/questions I have:

- What's the likelihood this technology isn't leapfrogged by a competitor or new entrant?

- What happens if regulators change their tune (for whatever reason)?

- Will people still care about their appearance in 5+ years? (lol jk)

The growth drivers as I see them:

- Continued penetration globally with InMode's existing products
- Regulatory approval in new int'l markets
- Growing repeat sales via consumables
- New products/platforms to expand use cases and cross-sell to existing customers

I'm still learning but color me intrigued. (h/t to TMFTypeoh for the intro to INMD)

Financials are rock-solid. Founder-led with skin in the game. Technology seems strong and increasingly relevant w/ many growth opportunities ahead.

So back to my first question: what am I missing?

David K
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