Markets

Inogen's Prospects in Europe Solid Amid Trade-Related Tension

An image of a stock chart with money, a calculator and a pen lying on it.
Credit: Shutterstock photo

On Mar 18, we issued an updated research report on Inogen, Inc.INGN . A strong fourth-quarter show and solid prospects in Europe currently favor the stock. On the contrary, trade-related uncertainties plague this Zacks Rank #3 (Hold) company.

What's Favoring the Stock?

In the recently-reported fourth quarter of 2018, Inogen posted earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents. The bottom line improved from a net loss of 3 cents in the year-ago quarter.

Revenues came in at $86.5 million, which trumped the Zacks Consensus Estimate of $82 million. On a year-over-year basis, the top line climbed 35.7%.

Reflective of this, Inogen retained its revenue and EBITDA outlook for 2019.

Notably, the company continues to expect revenues between $430 million and $440 million, representing 20.1-22.9% growth over 2018.

Full-year adjusted EBITDA is projected between $67 million and $71 million, representing 9.3-15.9% growth year over year.

Moreover, Inogen is optimistic about its prospects in Europe.

In the fourth quarter of 2018, Inogen's business-to-business unit saw international revenues of $18.5 million, up 54.5% year over year on continued adoption by the company's European partners. Per management, Europe sales represented 87.8% of fourth-quarter international sales.

Deterrents

Despite a better-than-expected fourth quarter, Inogen trimmed its 2019 net income guidance range to $40-$44 million from the previously-issued $48-$52 million. Per management, the slashed guidance is due to a fall in estimated provision for income taxes related to excess tax benefits recognized from stock-based compensation.

Additionally, the company's guidance assumes a full impact of the tariffs on applicable Chinese sourced materials since the increase of China import tax has been currently delayed by the United States, giving rise to trade-related uncertainties.

Price Performance

Over the past year, shares of Inogen have declined 23.5% against the industry 's 9.8% gain. The current level is also lower than the S&P 500 index's 4.3% rally.

Key Picks

A few better-ranked stocks in the broader medical space are Penumbra, Inc. PEN , Wright Medical Group N.V. WMGI and DexCom. Inc. DXCM . Notably, each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Penumbra's long-term earnings growth rate is expected at 20.9%.

Wright Medical's long-term earnings growth rate is estimated at 11.3%.

DexCom's next-quarter earnings per share are projected to grow 120%.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Inogen, Inc (INGN): Free Stock Analysis Report

Penumbra, Inc. (PEN): Free Stock Analysis Report

Wright Medical Group N.V. (WMGI): Free Stock Analysis Report

DexCom, Inc. (DXCM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

DXCM WMGI PEN INGN

Other Topics

Stocks