Hey thanks. Yes I mentioned it in my q3 update. Nothing has changed. They said they were going to do this in Q3 and just reiterated it during the q4 call. Thanks for the feedback!
Great question. At a price of about 20 USD, when I apply an inverse DCF, the market is pricing in 0 growth. It's about expectations, I bet on the fact that they will grow. If they do not, than I may be better off betting on something else. It doesn't mean the company is broken, but my initial thesis that motivated me to buy Inmode versus other options might be. I'm not sure this answers your question?
Yeah, I see. If you're looking for outperformance, then I understand why you would leave it as it could be dead money for a while.
As for me, I like to think a 100% in 5 years is a 15% IRR, which is great for me. So let's say in 5 years, they've accumulated 3/4 of their market cap in cash, and the stock hasn't moved one bit. Then, all of a sudden, growth picks up, or God forbid, they start buying back stock.
Could see this jumping up very fast. In the mean time, they do some R&D and keep rolling out product...
I completely understand why one would leave, but at the same time, if you look at the broader market ex Magnificent 7, it's not looking amazing.
Happy to keep it a bit longer for those reasons - may be dead money for a while but management seems competent albeit clueless on capital allocation and eventually I think that wins, and valuation provides a nice MOS at these prices.
Their CFO said in the earnings call they are starting to use their BS to take some risk from their customers on themselves.
This basically equals to lowering prices without saying it. (not relevant to the lawsuit)
We'll probably see the impact in their BS later this year in bad allowances or credit losses.
but their margins definetly took a hit and with the growth in R&D & sells we will see lower margins this year.
Hey thanks. Yes I mentioned it in my q3 update. Nothing has changed. They said they were going to do this in Q3 and just reiterated it during the q4 call. Thanks for the feedback!
You say it's still growing, but they are guiding to no growth this year...
Indeed. That's what worries me. If in 2024, they don't grow, than I might have to consider that the thesis is broken.
Do you think the thesis is broken if the market recedes or stays flat ? Essentially the company would be fine, the demand would be suppressed however
That would be like saying an oil company thesis is broken because a recession lowers oil prices, no ?
Great question. At a price of about 20 USD, when I apply an inverse DCF, the market is pricing in 0 growth. It's about expectations, I bet on the fact that they will grow. If they do not, than I may be better off betting on something else. It doesn't mean the company is broken, but my initial thesis that motivated me to buy Inmode versus other options might be. I'm not sure this answers your question?
Yeah, I see. If you're looking for outperformance, then I understand why you would leave it as it could be dead money for a while.
As for me, I like to think a 100% in 5 years is a 15% IRR, which is great for me. So let's say in 5 years, they've accumulated 3/4 of their market cap in cash, and the stock hasn't moved one bit. Then, all of a sudden, growth picks up, or God forbid, they start buying back stock.
Could see this jumping up very fast. In the mean time, they do some R&D and keep rolling out product...
I completely understand why one would leave, but at the same time, if you look at the broader market ex Magnificent 7, it's not looking amazing.
Happy to keep it a bit longer for those reasons - may be dead money for a while but management seems competent albeit clueless on capital allocation and eventually I think that wins, and valuation provides a nice MOS at these prices.
Happy to have exchanged with you 👍
I've set my holding period for 5 years, so in the same boat. Thanks for the feedback!