InMode (INMD) Margin Compression To 25.3% Tests Bullish High-Margin Narrative

InMode FY 2025 earnings recap and what the market narrative might be missing

InMode (INMD) just wrapped up FY 2025 with Q4 revenue of US$103.9 million and basic EPS of US$0.43, setting the tone for a year where trailing twelve month revenue landed at US$370.5 million and EPS came in at US$1.45. Over recent quarters, the company has seen revenue move from US$77.9 million in Q1 2025 to US$103.9 million in Q4, while quarterly EPS ranged between US$0.26 and US$0.43, and trailing net profit margin shifted from 45.9% to 25.3% over the last year, so investors are likely to focus on how this compression frames the quality of the latest results.

See our full analysis for InMode.

With the headline numbers on the table, the next step is to set these results against the big narratives around InMode and see where the recent margin picture and growth profile line up with, or push back on, what investors have been assuming.

See what the community is saying about InMode

Margins Slide From 45.9% To 25.3%

• Over the last twelve months, net profit margin moved from 45.9% to 25.3%, while trailing net income was US$93.8 million on US$370.5 million of revenue, so a much larger revenue base is now producing a smaller share of profit.
• Consensus narrative points to strong 80% gross margins and a focus on minimally and non invasive treatments as long term supports. However, the drop in net margin and FY 2025 EPS of US$1.45 versus the earlier trailing peak of US$2.55 shows rising expenses and mix shifts are already pressuring the bottom line in a way that challenges the idea of margin resilience.
  • Rising sales and marketing costs and higher exposure to lower priced noninvasive procedures in the consensus view help explain why a business with high gross margins can still see net margin fall by more than 20 percentage points.
  • For a beginner, it is a reminder that even when devices and consumables carry healthy gross margins, operating costs and pricing trends can materially change how much profit flows through to shareholders.

Revenue Growth Trails 3% Outlook

• Trailing twelve month revenue sits at US$370.5 million, with quarterly revenue between US$77.9 million and US$103.9 million in FY 2025. The data cites an expected revenue growth rate of about 3% per year, which is below the 10.3% annual forecast for the broader US market.
• Bulls argue that new wellness platforms and expansion into areas like urology and ophthalmology could greatly expand the addressable market. At the same time, the current 3% revenue growth expectation and the step down in trailing EPS from US$2.55 to US$1.45 suggest the business is not currently reflecting the higher growth path that the bullish story leans on.
  • Even with FY 2025 revenue in each quarter above US$77 million, the forecast pace still trails the broader US market, which does not yet line up with a narrative built around large new underpenetrated markets.
  • The bullish view that international expansion can drive higher growth has to sit alongside the present reality that recent one year earnings growth is negative versus the 4.3% five year trend, showing that scaling new markets is not yet flowing through to stronger overall growth figures.

Have bullish investors spotted something in these numbers that the rest of the market is missing, or are they leaning too hard on future products to offset slower growth and thinner margins right now? 🐂 InMode Bull Case

P/E Discount Vs DCF Fair Value

• The shares trade on a P/E of 9.8x against peer and industry averages of 39.8x and 33.2x and a US market level of 19.5x. The provided DCF fair value of US$10.24 sits below the current share price of US$14.62.
• Bears highlight that earnings momentum has turned negative over the last year and that margins have compressed sharply. The gap between the current price and DCF fair value, alongside the drop in trailing EPS from US$2.55 to US$1.45, gives that cautious view numerical backing even though the low P/E might initially look like a bargain.
  • The reduced trailing net income of US$93.8 million from earlier levels near US$178.7 million in the narratives helps explain why a seemingly cheap P/E can coexist with a DCF fair value that is well under the share price.
  • For you as an investor, the mix of a low P/E, weaker recent earnings, and a DCF fair value below market price means the numbers support the bearish concern that the market may be pricing in more stability than the last twelve months actually show.

If you are weighing that valuation gap and wondering how much further earnings softness the business can absorb, it is worth seeing how skeptics frame the risks around margins, regulation, and demand. 🐻 InMode Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for InMode on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers differently? If this story looks different through your lens, shape it into your own view in just a few minutes: Do it your way.

A great starting point for your InMode research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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InMode is facing thinner net margins, softer earnings and revenue expectations, and a P/E that looks low but sits above an indicated DCF fair value.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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