Why Israel-Based Medical Technology Company InMode's Shares Are Tumbling Today

InMode Ltd INMD shares are trading lower by over 20% after the company issued Q3 guidance below estimates and lowered FY23 revenue guidance.

The company expects Q3 revenue of $122.8 million-$123.0 million (vs. consensus of $136.94 million) and adjusted EPS of $0.59-$0.60 (vs. $0.66 street view). 

INMD sees Q3 adjusted gross margin in the 83%-85% range. 

For FY23, INMD lowered revenue guidance to $500 million-$510 million from $530 million-$540 million, vs. consensus of $538.03 million). 

The company expects an economic slowdown to impact its platform sales this year, including seasonal Q3 and slower purchase decisions due to lower aesthetic activity in the summertime.

Moreover, INMD platform sales activity has been impacted by financing constraints of medical equipment due to higher interest rates, tighter leasing approval standards, and bottlenecks in loan processing.

Addressing its activity status in Israel, InMode recently said it doesn't anticipate any interruption to production, with inventory levels globally and in Israel sufficient and include components and subassemblies for the next three quarters.

The company expects to release its Q3 FY23 results on November 2, 2023.

Price Action: INMD shares are down 20.94% at $22.13 on the last check Thursday.