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Inogen (INGN) Up 9.7% 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 9.7% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Inogen Q4 Earnings Miss Estimates, 2020 Guidance Dull

Inogen reported fourth-quarter 2019 earnings per share of 7 cents, which lagged the Zacks Consensus Estimate of 11 cents. This compares to earnings of 44 cents in the year-ago quarter.

Revenues of the company came in at $78.9 million, which surpassed the Zacks Consensus Estimate by 0.02%. On a year-over-year basis, the top line dropped 8.8%.

Segmental Details

Revenues at the Sales segment amounted to $73.5 million in the quarter under review, down 9% on a year-over-year basis.

Rental revenues grossed $5.4 million, down 6.1% year over year.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $20.6 million, down 18.9% on a year-over-year basis. Per management, Inogen saw a decline in orders from one of its private label partners.

Internationally, this segment recorded revenues of $17.1 million, down 7.7% year over year and 5.1% at constant currency. Per management, the decline was primarily led by tender uncertainty in certain European regions and currency headwinds.

Direct-to-consumer revenues fell 2.8% year over year to $35.8 million in the quarter.

Margins

In the fourth quarter, gross profit was $33.9 million, down 22.1% year over year. Gross margin came in at 43%, down a significant 740 basis points (bps).

Loss from operations in the quarter was $5.3 million against operating profit of $4.8 million a year ago.

Guidance

For 2020, Inogen continues to expect revenues within $385-$400 million, calling for 6.4-10.5% growth over 2019. The Zacks Consensus Estimate for the same is pinned at $402.2 million.

Notably, Inogen expects modest growth in rental revenues in 2020 compared to 2019.

Also, the company expects to report loss per share for the first quarter of 2020.

That’s not all. Inogen expects 2020 EBITDA within $44-$50 million, down from the earlier projected $56-$58 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -168.97% due to these changes.

VGM Scores

Currently, Inogen has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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 F. 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. Notably, 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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