Technology

Inogen (INGN) Up 7.2% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Inogen (INGN). Shares have added about 7.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Inogen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Inogen's Q3 Earnings Beat Estimates, 2019 Guidance Intact

Inogen reported third-quarter 2019 earnings per share of 31 cents, which beat the Zacks Consensus Estimate of 23 cents. The bottom line also plunged 57.5% year over year.

Revenues of the company came in at $91.8 million, which surpassed the Zacks Consensus Estimate of $91.4 million. On a year-over-year basis, the top line dropped 3.7%.

Segmental Details

Revenues in the Sales segment amounted to $86.4 million in the quarter under review, down 3.72% on a year-over-year basis.

Rental revenues totaled $5.4 million, down 3.8% year over year.

Revenues by Region and Category

Business-to-business revenues in the United States amounted to $30.1 million, down 0.4% on a year-over-year basis. Per management, the downside was caused by decline in orders from one large national provider.

Internationally, this segment recorded revenues of $18.5 million, down 12.5% year over year and 10.2% at constant currency. Per management, the decline was caused by a slowdown of orders in Great Britain and Spain due to tender uncertainty, capital expenditure constraints, and softness of orders in France.

Direct-to-consumer revenues rose 1.4% year over year to $37.8 million in the quarter under review on higher sales representative productivity.

Margins

In the third quarter, gross profit was $47 million, down 11.5% year over year. Gross margin came in at 51.2%, down significantly by 420 basis points (bps).

Operating income was $8.1 million, down 22% year over year. Operating margin came in at 8.8% of net revenues, down 200 bps from the prior-year quarter’s figure.

Guidance

For 2020, Inogen expects total revenues in the range of $410-$415 million, which suggests 10.1-11.4% growth over the 2019 guidance mid-point of $372.5 million. The company expects rental revenues to be up modestly on a year-over-year basis.

Inogen forecasts 2020 net income in the range of $25-$27 million, which calls for growth of 4.2-12.5%.

For 2019, Inogen has kept its guidance intact.

The company expects revenues in the range of $370-$375 million, calling for year-over-year growth of 3.3-4.7%.

2019 net income guidance range is expected in the band of $23-$25 million. Operating income guidance is in the range of $26-$28 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -33.33% due to these changes.

VGM Scores

At this time, Inogen has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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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.

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