A month has gone by since the last earnings report for Inogen (INGN). Shares have lost about 12.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Inogen 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 drivers.
Inogen Q4 Earnings Beat Estimates, Guidance Retained
Inogen reported fourth-quarter 2018 earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents. The bottom line also improved from a net loss of 3 cents per share incurred in the year-ago quarter.
Revenues came in at $86.5 million, which trumped the Zacks Consensus Estimate of $82 million. On a year-over-year basis, the top line climbed 35.7%.
Segmental Details
Sales revenues amounted to $80.7 million in the quarter under review, up 38.4% on a year-over-year basis.
Rental revenues totaled $5.8 million, up 6.7% on a year-over-year basis.
Revenues by Region and Category
Business-to-business revenues in the United States summed $25.4 million, up 16% on a year-over-year basis. The uptick was primarily driven by increased sales representative headcount and additional consumer advertising. Internationally, this segment recorded revenues of $18.5 million, up 54.5% year over year courtesy of continued adoption from the company’s European partners.
Direct-to-consumer revenues in the United States grossed $36.8 million in the fourth quarter. This reflects an increase of 50.4% from the prior-year quarter. The upside can be attributed to continued adoption by traditional home medical equipment providers and internet resellers. Direct-to-consumer domestic rentals witnessed net revenues of $5.8 million, up 6.7% year over year.
Margins
In the quarter under review, gross profit was $43.6 million, up 41.7% year over year. Gross margin came in at 50.4%, which expanded 220 basis points (bps).
Operating income was $4.8 million, down 8% year over year. Operating margin came in at 5.5% of net revenues, down 260 bps from the prior-year quarter.
Adjusted EBITDA was $10.5 million, down 9.5% on a year-over-year basis.
2019 View
Inogen reiterated its outlook for 2019. Revenues are expected between $430 million and $440 million, representing 20.1-22.9% growth over 2018.
Full-year adjusted EBITDA is projected between $67 million and $71 million, representing 9.3-15.9% growth year over year.
Inogen lowered its full-year GAAP net income guidance range to $40-$44 million from the previously-projected band of $48-$52 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -7.81% due to these changes.
VGM Scores
Currently, Inogen has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Inogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Inogen, Inc (INGN): Free Stock Analysis Report
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