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Inogen One G4 Cleared for Onboard Use, Market Hold Strong

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Inogen Inc (INGN - Free Report) recently announced that its One G4 portable oxygen concentrator (POC) received an approval from the department of transportation and the Federal Aviation Administration for its exclusive use on commercial flights.

Additionally, One G4 is also set to be launched in the company’s domestic business-to-business channel in a phased approach, in line with the company’s expansion plans. However, following the news, shares of Inogen fell 0.6% to close at $56.67.

Nevertheless, the current market sentiments are quite lucrative for the company as it represents a strong one year return of 21.4%, as compared with the S&P 500’s 15.3% over the same time frame. Such a trend should drive the product’s rollout in the new business channels and enhance Inogen’s growth trajectory.

Notably, One G4 is an ‘ultra-portable’, small and light weight (2.8 pounds) oxygen concentrator that was released in May 31, 2016 (in direct-to-consumer sales channel). The recent development highlights the product’s introduction in other channels, expanding its market hold and marking its exclusive use during commercial air travels.

Our Take

The recent second-quarter earnings marked a major decline in rental revenues which is a matter of concern as it might mar the company’s growth prospects in the coming quarters. We believe the step forward in the oxygen therapy market with One G4 will help Inogen fortify its market position.

Meanwhile, the global market trends are quite lucrative, as an analysis by the Global Market Insights reveals that medical oxygen concentrators market is forecasted to reach a worth of $2.3 billion by 2023.

Buoyed by this trend and the future plans of management to tap in on significant opportunities in the domestic and international business-to-business channels, we presume Inogen will significantly gain traction in the oxygen concentrator and related ancillary markets benefitting from this development.

Zacks Rank & Key Picks

Currently, Inogen has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector include CryoLife Inc. , Masimo Corporation (MASI - Free Report) and Idexx Labs Inc. (IDXX - Free Report) . Notably, all the three stocks sport a Zacks Rank #1 (Strong Buy).

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