Inogen, Inc. (INGN Quick QuoteINGN - Free Report) is well-poised for growth in the coming quarters, courtesy of high prospects in the portable oxygen concentrator (POC) space. The optimism, led by solid fourth-quarter 2024 performance and a strong product portfolio, seems justified. However, issues like stiff competition and forex volatility are major downsides.

The Zacks Rank #2 (Buy) company’s shares have risen 45.5% in the past six months compared with 6.7% growth of the industry. The S&P 500 has increased 16.5% during the same time frame.

The renowned provider of POCs has a market capitalization of $284.9 million. The company projects 14.5% earnings growth for 2025 and expects to witness continued improvements in its business going forward. Inogen’s P/S ratio of 0.9X compared with the industry’s 3.1X makes its valuation attractive.

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Let us delve deeper.

Huge Prospects in the POC Space: We are optimistic about POCs’ superiority over conventional oxygen therapy (known as the delivery model). Inogen primarily develops, manufactures and markets innovative POCs to provide supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions.

Inogen showed strong prospects in the POC (Portable Oxygen Concentrator) market, driven by a 20% year-over-year business-to-business (B2B) channel growth for the second consecutive quarter during the third quarter. This was due to increasing recognition of the benefits of Inogen's solutions, including quality, ease of servicing and long service life. Per a report by Future Market Insights, the POCs market was valued at $2.2 billion in 2022 and is anticipated to reach $4.3 billion by 2034 at a CAGR of 6.7%.

Product Portfolio: We are optimistic about Inogen’s expanding product portfolio. The company launched the lightest POC in the market, Rove 4, during the third quarter of 2024. The device has advanced features such as 840 milliliters of medical-grade oxygen per minute and up to 5 hours and 45 minutes of battery life. Early adoption appears promising, especially for identifying patients earlier in their disease state and enabling potential upgrades. The company believes that Rove 4 will significantly boost the top line in 2025.

Additionally, INGN received FDA clearance for Simeox in December 2024 to market the device and meet the various needs of patients with chronic respiratory diseases in the United States.

Strong Q4 Results: Inogen reported strong preliminary results last month. It announced strong preliminary revenue results for fourth-quarter and full-year 2024. The company anticipates fourth-quarter revenues to be between $79 million and $80 million, reflecting 4-5% year-over-year growth. Full-year 2024 revenues are projected to be in the band of $334.5-$335.5 million, up 6% from the 2023 level. The projection was higher than the company’s prior guidance of $329-$331 million. 

Revenue growth was fueled by strong double-digit gains in business-to-business sales. Although direct-to-consumer sales declined, profitability improved due to cost management efforts. Management remains optimistic about continued growth in 2025, expecting better year-over-year performance. The company’s return to revenue growth, increased profitability and disciplined cost control enhance confidence in its prospects. With strong product adoption and expanding customer relationships, Inogen is well-positioned for sustained success in the coming year.

Risks

Seasonality Impact: The fourth quarter is expected to have been seasonally weaker, particularly in the DTC channel, with anticipated difficulties in generating leads and increased advertising challenges. Moreover, the DTC channel experienced revenue decline during the third quarter due to operating with a smaller, streamlined sales team, a trend that is likely to have hurt fourth-quarter performance further.

Forex Volatility: The foreign market accounts for a sizeable amount of INGN's income.  Management anticipates overseas revenues to continue to be erratic due to the distributor's size and timing. In the near future, INGN expects unfavorable foreign exchange rates to hinder revenue growth since the U.S. dollar is increasing compared to the euro and other foreign currencies.

Inogen, Inc Price

Inogen, Inc price | Inogen, Inc Quote

Estimate Trend

Inogen has been witnessing a positive estimate revision trend for 2025. In the past 60 days, the Zacks Consensus Estimate for its loss per share has narrowed 3.3% to $1.48.

The Zacks Consensus Estimate for 2025 revenues is pegged at $343.6 million, suggesting a 4.3% improvement from the year-ago reported number.

Other Stocks to Consider

Some other top-ranked stocks in the broader medical space are Cardinal Health, Inc. (CAH Quick QuoteCAH - Free Report) , ResMed Inc. (RMD Quick QuoteRMD - Free Report) and Alphatec (ATEC Quick QuoteATEC - Free Report) .

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%. Its shares have risen 27.2% compared with the industry’s 5.6% growth in the past six months.

ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.86%.

ResMed’s shares have gained 11.5% compared with the industry’s 15.4% growth in the past six months.

Alphatec, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 40% for 2025. ATEC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.6%.

Alphatec’s shares have rallied 46.4% compared with the industry’s 8.8% growth in the past six months.