Inogen (INGN) Soars to 52-Week High, Time to Cash Out?

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Have you been paying attention to shares of Inogen (INGN)? Shares have been on the move with the stock up 23.3% over the past month. The stock hit a new 52-week high of $266.58 in the previous session. Inogen has gained 119.7% since the start of the year compared to the 7.6% move for the Zacks Medical sector and the -5.3% return for the Zacks Medical - Instruments industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 7, 2018, Inogen reported EPS of $0.65 versus consensus estimate of $0.44.

For the current fiscal year, Inogen is expected to post earnings of $2.06 per share on $348.83 million in revenues. This represents a 57.25% change in EPS on a 39.85% change in revenues. For the next fiscal year, the company is expected to earn $2.15 per share on $426.18 million in revenues. This represents a year-over-year change of 4.61% and 22.18%, respectively.

Valuation Metrics

Inogen may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Inogen has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 127X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 133.6X versus its peer group's average of 24X. Additionally, the stock has a PEG ratio of 5.18. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Inogen currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Inogen fits the bill. Thus, it seems as though Inogen shares could have a bit more room to run in the near term.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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