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Inogen (INGN) Up 14.7% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Inogen (INGN - Free Report) . Shares have added about 14.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Inogen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Inogen Beats on Q2 Earnings, 2018 Sales Guidance Raised

Inogen posted second-quarter 2018 earnings per share of 65 cents, beating the Zacks Consensus Estimate by 47.7%. Earnings also improved a whopping 71.1% from the year-ago quarter.

Revenues totaled $97.2 million, which outpaced the Zacks Consensus Estimate of $81.6 million. On a year-over-year basis, revenues climbed 51.6%.Over the past year, shares of Inogen have skyrocketed 129.9% against the industry’s decline of 4.6%.

Segmental Details

Sales revenues totaled $92 million, up 58.5% on a year-over-year basis.

Business-to-business sales in the United States totaled $32.9 million, up 55.7% on a year-over-year basis.

Per management, the upside can be attributed to continued success with Inogen’s private label partner and traditional home medical equipment providers.

Internationally, this segment recorded sales of $20.8 million, up 39.1% year over year. Management believes that continued adoption from the company’s European partners and favorable currency exchange rates drove overseas sales.

Direct-to-consumer revenues in the United States grossed $38.3 million in the quarter. This reflects an increase of 74.3% from the prior-year quarter.

Per management, results at this segment exceeded the company’s expectations owing to increased sales representative headcount and associated consumers' advertising. Inogen expects to increase hiring in Cleveland by 2020-end to 500 employees.

The segment posted rentals worth $5.3 million, down 13.7% from the year-ago quarter.

Margins

In the quarter under review, gross profit totaled $48.5 million, up 53.5% year over year. Gross margin came in at 49.8%, which expanded 60 basis points (bps) in the quarter.

Operating income totaled $14 million, which climbed a significant 65% year over year. Operating margin in the quarter was 14.4%, up 110 bps in the reported quarter.

Adjusted EBITDA in the quarter was $19 million, up 32.2% on a year-over-year basis.

Guidance

Inogen raised its 2018 revenue guidance to the range of $340 to $350 million from $310 to $320 million, representing year-over-year growth of 36.3% to 40.3%.

Inogen expects direct-to-consumer sales to be its fastest growing channel and domestic business-to-business sales to have a significant growth rate in 2018.

Internationally as well, business-to-business sales are expected to register solid growth as Inogen continues to focus on European markets. However, rental revenues are expected to decline 10% in 2018.The company’s 2018 adjusted net income guidance range is at $45 to $48 million, up from $38 to $41 million, representing year-over-year growth of 114.3% to 128.5%.

Adjusted EBITDA for the year is expected between $65 million and $69 million, up from $62-$67 million, representing 27.9% to 35.7% year-over-year growth.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted 6.06% due to these changes.

VGM Scores

At this time, Inogen has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

Inogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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