It has been about a month since the last earnings report for Inogen (INGN Quick QuoteINGN - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Inogen due for a breakout? 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 drivers.

Inogen Q3 Earnings Miss Estimates, Revenues Down Y/Y

Inogen incurred an adjusted loss per share of 36 cents for third-quarter 2023, wider than the adjusted loss per share of 18 cents in the year-ago period. The Zacks Consensus Estimate was pegged at a loss of 57 cents per share.

GAAP loss per share for the quarter was $1.97, wider than the year-earlier loss of 42 cents per share.

Revenues in Detail

Inogen registered revenues of $83.9 million for the third quarter, down 20.3% year over year. The figure surpassed the Zacks Consensus Estimate by 3.8%.

On a constant-currency basis, total revenues for the reported quarter decreased 21.5%.

Per management, the year-over-year decrease in the top line primarily resulted from lower domestic business-to-business sales and lower direct-to-consumer revenues. However, this was partially offset by strong growth in rental and international business-to-business sales.

Segmental Details

Inogen derives revenues from two sources — rental and sales.

Rental revenues for the reported quarter grossed $15.9 million, up 8.7% from the year-ago period. Per management, an increase in the total number of rental patients on service resulted in the upside.

Sales revenues were $67.9 million, down 25% from the prior-year quarter.

Revenues by Region & Category

Domestic business-to-business sales for third-quarter 2023 amounted to $17.3 million, down 59.4% on a year-over-year basis.

International business-to-business sales for the reported quarter amounted to $25.6 million, up 69.8% year over year on a reported basis and up 62% on a constant-currency basis.

Domestic direct-to-consumer sales decreased 24.1% year over year to $25.1 million for the quarter.

Margins

For the quarter under review, Inogen’s adjusted gross profit fell 18.6% from the year-ago period to $37.1 million. However, the adjusted gross margin expanded 96 basis points to 44.2%.

Sales and marketing expenses decreased 22.7% from the year-ago quarter to $26.1 million. Research and development expenses decreased 2% year over year to $4.5 million, while general and administrative expenses increased 15.1% to $17 million. Adjusted operating expenses of $47.6 million decreased 10.4% year over year.

Adjusted operating loss totaled $10.5 million compared with the prior-year quarter’s adjusted operating loss of $7.5 million.

Financial Position

Inogen exited third-quarter 2023 with cash and cash equivalents of $124.6 million compared with $167.7 million at the second-quarter end.

The company ended the quarter with no debt on its balance sheet.

Cumulative net cash used in operating activities at the end of third-quarter 2023 was $0.1 million compared with $22.1 million a year ago.

Guidance

Inogen has reiterated its revenue outlook for the full year.

The company continues to expect its total revenues between $315 million and $320 million. The Zacks Consensus Estimate currently stands at $317.7 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -36.84% due to these changes.

VGM Scores

At this time, Inogen has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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.

Performance of an Industry Player

Inogen is part of the Zacks Medical - Instruments industry. Over the past month, Nevro , a stock from the same industry, has gained 16.8%. The company reported its results for the quarter ended September 2023 more than a month ago.

Nevro reported revenues of $103.86 million in the last reported quarter, representing a year-over-year change of +3.4%. EPS of -$0.65 for the same period compares with -$0.62 a year ago.

For the current quarter, Nevro is expected to post a loss of $0.48 per share, indicating a change of +11.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Nevro. Also, the stock has a VGM Score of A.