Will inflation hinder cosmetic equipment?

Manufacturer of minimally invasive aesthetic medicine equipment InMode Ltd. (INMD) is trading more than 70% below a 52-week high, although the quotes have increased by almost 30% over the past month. At the auction on July 18, the INMD stock was worth $26.63. Aesthetic medicine by elastic demand: interest in services strongly depends on cost. That is why investors fear that due to rising inflation, less InMode equipment will, as well as fewer procedures with this equipment, will. 

But InMode has a serious advantage over other manufacturers of cosmetic equipment. In particular, the company produces devices based on patented technology using radio frequencies. Such devices are minimally invasive, cause minimal discomfort for patients, but allow them to achieve significant effects in figure correction and restoration of skin conditions. There are few minimally invasive procedures with such an impact on the market. In addition, the availability of technology patents additionally protects InMode and allows you to dictate prices even in conditions of inflation. 

Thus, inflation is likely to affect InMode and the entire aesthetic medicine industry. However, in conditions of limited financial resources, consumers who need aesthetic medicine services can opt for InMode equipment that provides high-quality services. Recently, InMode presented preliminary data for the second quarter, which show high demand despite economic uncertainty. The company expects sales in the second quarter to grow 30% year-on-year and amount to $113 million. Adjusted profit from operating activities for the whole year may exceed $200 million, which is 48% more year-on-year. 

InMode sells equipment and consumables for carrying out procedures with its help. Only 16% of the company’s income comes from selling consumables, so it’s time for the business to grow. In the long term, the revenue ratio will change favor of accessories will make InMode’s revenue more predictable and regular.