Why Is Inogen (INGN) Down 7% Since its Last Earnings Report?

A month has gone by since the last earnings report for Inogen, Inc INGN. Shares have lost about 7% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is INGN 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 catalysts.

Recent Earnings

Inogen reported adjusted fourth-quarter earnings of 31 cents per share, outpacing the Zacks Consensus Estimate by 47.6%. Earnings increased 24% on a year-over-year basis.

Total revenues in the reported quarter rose 25.4% to $63.8 million on a year-over-year basis. The figure beat the Zacks Consensus Estimate by 2.9%.

Per management, the promising results were largely driven by record sales in the company’s domestic direct-to-consumer channel and in the domestic business-to-business channel.

In the fourth quarter, total units sold were 34,000, up 45.9% year over year.

Moreover, in the past six months, Inogen has outperformed the industry in terms of price. The stock has returned 39.1% compared with the industry’s rally of 15.3%.

Segmental Analysis

Sales Revenues in the fourth quarter totaled $58.4 million, reflecting year-over-year increase of 37%.

Rental Revenues declined 34% to $5.4 million on year-over-year basis.

In the quarter under review, Business-to-business sales (domestic and international) rose 25% to $33.8 million.

Direct-to-consumer sales (domestic and international) increased 23.9% to $29.5 million on a year-over-year basis.

Margins

For the fourth quarter, gross margin was 48.2%, down 30 basis points (bps) on a year-over-year basis. The decline was primarily due to the $2-million Cures Act benefit recorded in the fourth quarter of 2016.

However, operating expenses rose to $25.6 million, reflecting an increase of 38% on year-over-year basis, owing to a $1.4-million increase in research and development expenditures. This was further propelled by a 39.9% increase in sales, general and administrative spending.

Furthermore, adjusted EBITDA rose 5.8% to $11.6 million from the year-ago quarter.

Financial Position

Inogen exited the fourth quarter with cash, cash equivalents and marketable securities of $173.9 million, compared with $163.1 million in the year-ago quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted by 14.1% due to these changes.

Inogen, Inc Price and Consensus

 

Inogen, Inc Price and Consensus | Inogen, Inc Quote

VGM Scores

At this time, INGN has an average Growth Score of C, however its Momentum is doing a lot better with an A. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

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

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