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Analyst Blog

Inogen Inc. (INGN - Free Report) reported third-quarter 2016 earnings of 16 cents per share, which surpassed both the Zacks Consensus Estimate and the year-ago number by 3 cents.

The upside was driven by an almost 33.5% growth in revenues, which totaled $54.4 million, beating the Zacks Consensus Estimate of $48.0 million.
 

Segment Details

Sales revenue surged 61.3% to $47.2 million, while rental revenues decreased 37.2% to $7.2 million.

Business-to-business domestic sales were up 65.1% on a year-over-year basis to $16.2 million, primarily driven by traditional home medical equipment provider purchases and the continued strength of the private label partner.

Meanwhile, business-to-business International sales rose roughly 90.0% to almost $15.0 million, on the back of strong performance in Europe.

Direct-to-consumer domestic sales advanced 38.6% to $16.1 million and direct-to-consumer rental sales fell 37.2% to $7.2 million. Unit sales in the quarter surged 81.0% on a year-over-year basis to 26,600 units. Rental patient population increased 4.0% to 33,700.

Guidance

Inogen revised its outlook for full-year 2016. The company now projects revenues in the range of $194 million to $198 million, better than the previous range of $190–$194 million. This represents year-over-year growth of 22.0% to 24.5%.

The company maintained its 2016 adjusted net income in the range of $12.5 million to $14.5 million. This represents growth of 24.8% to 44.8% over 2015.

Adjusted EBITDA is expected between $37.5 million and $39.5 million, representing an increase of 16.1% to 22.3% over 2015.
 

INOGEN INC Price, Consensus and EPS Surprise

INOGEN INC Price, Consensus and EPS Surprise | INOGEN INC Quote

Our Take

In our view, the major positives for Inogen in the reported quarter are solid domestic and international business-to-business sales, the launch of Inogen One G4, growing unit sales and strong patient demand.

Moreover, the step forward in the oxygen therapy market with Inogen One G4 is expected to enhance the company’s direct-to-consumer sales channel over the long haul.

However, soaring rental revenues is a matter of concern, which might mar the company’s growth prospects in the coming quarters.

Zacks Rank & Key Picks

Inogen carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical space include Cardiovascular Systems Inc. (CSII - Free Report) , Exelixis, Inc. (EXEL - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, Exelis and Cardiovascular systems sport a Zacks Rank #2 (Buy). However, IDEXX has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cardiovascular Systems represents a stellar one-year return of 52.8%. Notably, the company has an expected long-term growth rate of 22.5%.

Exelis has a stupendous one-year return of almost 94%. In the last reported quarter, the company registered an impressive earnings surprise of 40.74%.

IDEXX Laboratories represents a promising one-year return of 50.23%. The company has a long-term expected growth rate of almost 14.8%.

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