Though both medical companies beat fourth-quarter forecasts, their stocks had divergent reactions to expectations for the current year. InMode, which provides tools to smooth skin and kill fat cells, issued a light earnings outlook, though sales guidance beat.
For Medpace, the company’s high exposure to the struggling small-cap pharma and biotech segment is weighing on its shares, UBS analyst John Sourbeer said. Medpace helps biopharma and medtech companies organize and run the clinical studies necessary to gain approval.
In morning trades on the stock market today, INMD stock surged 4% to 35.36. Medpace stock, on the other hand, tumbled 7.3% to 212.25.
“While commentary on what drove the strong results (for Medpace) was not provided, we believe some uncertainty remains, given the company’s outsized exposure to small pharma/biotech (about 85% of revenue),” Sourbeer said in a note to clients. “Still, we note commentary from Iqvia Holdings (IQV) last week points to a healthy (contract research organization) environment.”
INMD Stock: Growth Continues, But Slows
During the fourth quarter, InMode earned an adjusted 78 cents per share, climbing 22% year over year and beating expectations for 67 cents a share. Sales surged 21% to $133.6 million, above INMD stock analyst calls for $129.7 million.
Quarterly sales growth slowed from 29% in the third quarter, however.
The company noted its minimally invasive and under-the-skin fat ablating treatments brought in 83% of sales. Another 9% came in from its hands-free platforms, while 8% of sales stemmed from its non-invasive radio-frequency platforms. The latter technology helps tighten skin.
Sales of consumables — one-time-use tools specific to each patient and procedure — hit a record $17.1 million, growing 43%.
For the year, InMode expects to earn $2.58-$2.60 per share, below expectations for $2.64, according to FactSet. The company also predicted $525 million to $530 million in sales, north of INMD stock analysts’ call for $524 million.
Medpace Beats Across The Board
Medpace issued an across-the-board beat with $2.12 earnings per share and $394 million in sales — growing a respective 61% and 27.5%.
Analysts’ earnings expectations ranged from $1.77 to $1.79 a share, according to FactSet and UBS’ Sourbeer. The Street also had forecast sales between $386 million to $387 million.
For the year, Medpace expects $1.69 billion to $1.75 billion in sales. At the midpoint sales would grow close to 18%. Analysts forecast $1.7 billion in sales, a hair below the middle of Medpace’s outlook.
The company also expects to earn $7.53-$8.14 per share. The midpoint is well above calls for $7.70 a share.
Medpace stock has a strong Relative Strength Rating of 93, according to IBD Digital. That puts it in the top 7% of all stocks in terms of 12-month performance. Shares also have a Composite Rating of 95 on a 1-99 scale. In comparison, INMD stock has a lower RS Rating of 52 and CR of 85.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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