Inogen (INGN) Hits A 52-Week High On Solid Q1, Upbeat View

Shares of Inogen Inc. (INGN) rallied to a new 52-week high of $89.54 on May 26, eventually closing a tad bit lower at $87.93. This represents a strong one-year return of about 84.6%, much better than the S&P 500’s return of roughly 9.7%.

Inogen has had an impressive run on the bourse on a year-to-date basis as well. The company has gained around 30.9%, higher than the Zacks categorized Medical–Instruments sub-industry’s addition of just 15%. The stock has a market cap of $1.81 billion and a long-term expected earnings growth rate of 17.5%. Currently, Inogen sports a Zacks Rank #1 (Strong Buy).

Let us take a look at the key catalysts driving the stock’s performance.

Solid Q1 Results

Inogen reported a solid first quarter of 2017, beating the Zacks Consensus Estimate on both the counts. The beats came on the back of roughly 22.1% growth in revenues, which totaled $52.5 million.

Business-to-business domestic sales were up 84.2% on a year-over-year basis to almost $17.4 million, primarily driven by traditional home medical equipment provider purchases. Direct-to-consumer domestic sales rose 27.8% to almost $17 million.

FY17 Guidance Upbeat

Inogen raised its full-year adjusted net income guidance. The company projects revenues in the range of $233–$239 million, higher than the previous range of $230–$236 million. This represents year-over-year growth of 14.9%–17.8%. The company expects rental revenue to decline in 2017, thanks to lower average rental revenues per patient.

Adjusted EBITDA is projected in the band of $46–$50 million, representing an increase of 6%–15.2% year over year.

Inogen expects adjusted net income in the band of $22 million to $24 million, up from the previous projection of $21–$23 million. This represents 7.2%–17% year-over-year growth.

Rising Estimate Revision Trend

Estimate revisions for Inogen have been favorable.

The year has seen five estimates move north over the last two months, compared to no movement in the opposite direction. As a result, full-year estimates increased 12.2% to $1.10 over the same time frame.

Inogen, Inc Price and Consensus

Inogen, Inc Price and Consensus | Inogen, Inc Quote

Strong Product Pipeline

Inogen is a leading manufacturer of portable oxygen concentrators or POCs that serve patients with obstructive pulmonary disease. Inogen’s expanding product portfolio is a key growth catalyst. Apart from Inogen One G3 and G2 concentrators, the company offers Inogen ‘At Home stationary oxygen concentrator’ which helps it to address the needs of non-ambulatory patients.

Key Picks

Better-ranked stocks in the broader medical sector include Luminex Corporation (LMNX), Edwards Lifesciences Corp. (EW) and Accelerate Diagnostics, Inc (AXDX). Notably, Luminex sports a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences and Accelerate Diagnostics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 7.1% over the last three months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.6%. The stock has a solid one-year return of around 13.6%.

Accelerate Diagnostics projects long-term adjusted earnings growth of almost 30%. The stock returned 30.9% over the last one year.

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