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Inogen (INGN) Up 35.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Inogen (INGN - Free Report) . Shares have added about 35.6% 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 Reports Q3 Loss, Revenues Miss Estimates

Inogen, Inc. reported third-quarter 2020 loss per share of 8 cents, wider than the Zacks Consensus Estimate of a loss of 2 cents.However, the company had reported earnings per share of 31 cents in the year-ago quarter.

Revenues of this company came in at $74.3 million, which missed the Zacks Consensus Estimate by 0.8%. On a year-over-year basis, the top line dropped 19.1% mainly due to the impact of the COVID-19 pandemic.

Segmental Details

Rental revenues grossed $7.5 million, up 40.1% from the year-ago period.

Sales revenues came in at $66.8 million, down 22.7%.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $23.1 million, down 23.5% on a year-over-year basis. Per management, the decline was primarily owing to lower demand from resellers and home medical equipment (“HME”) providers for portable oxygen concentrators (“POCs”).

Internationally, this segment recorded revenues of $14.6 million, down 21.1% year over year and 23% at constant currency. Per management, the decline was mainly led by temporary lowering of operating capacity of certain European respiratory assessment centers as a result of the COVID-19 pandemic, consistent tender delays in certain European markets, and decline insales in other markets, primarily Canada and Australia.

Direct-to-consumer revenues fell 22.7% year over year to $29.2 million in the quarter.Sales declined due to the impact of the COVID-19 pandemic on consumer travel and mobility along with lower consumer confidence.

Margins

In the third quarter, gross profit was $33 million, down 23.8% year over year. Gross margin came in at 44.4%, down a significant 280 basis points (bps).

Total operating costs came at $34.9 million, down 0.7%.

Loss from operations in the quarter was $1.9 million against the year-ago quarter’s operating profit of $8.1 million.

Cash Position

The company exited the third quarter with cash and cash equivalents of $213.9 million, compared with $214.1 million at the end of the second quarter.

Guidance

Due to the uncertainty around the impact and scope of the COVID-19 pandemic on its business, the company has not issued full-year 2020 or 2021 guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -174.51% due to these changes.

VGM Scores

At this time, Inogen has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 indicates a downward shift. It's no surprise Inogen has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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