Inogen's Solid Europe Business Shapes Q2, Prospects Bright
On Aug 13, we issued an updated research report on Inogen, Inc. INGN. The company’s strong global foothold and an upbeat 2018 view are major positives.
The stock currently carries a Zacks Rank #2 (Buy).
Price Performance
Over the past year, shares of Inogen have skyrocketed 145.4% against the industry’s decline of 6.2%. The current level is also higher than the S&P 500 index’s gain of 15.6%.
Over the last 60 days, the Zacks Consensus Estimate for current-quarter earnings per share climbed 8.3% to 52 cents.
Inogen, Inc Price and Consensus
Inogen, Inc Price and Consensus | Inogen, Inc Quote
What’s Favoring the Stock?
Inogen has a bright outlook for European sales in 2018. In fact, management is optimistic about the long-term opportunities.
In the recently-reported second quarter of 2018, sales in Europe represented 88.3% of international sales, up from 87.6% a yearago. Inogen’s European partners significantly contributed to business-to-business sales in the quarter. The company expects modest growth in international sales in the rest of 2018, with focus on Europe. Furthermore, Inogen received French reimbursement coverage forInogen One G4 in the quarter.
Additionally, Inogen’s European partners drove international sales at the core business-to-business unit which grossed $20.8 million.
Moreover, a favorable reimbursement scenario in countries like Germany, France and the U.K. opens upsignificant growth opportunities for Inogen. Germany is estimated to be the second largest market in Europe for medical oxygen systems.
Buoyed by the solid second-quarter results, Inogen raised its 2018 revenue guidance to the range of $340 to $350 million from $310 to $320 million, representing year-over-year growth of 36.3% to 40.3%.
Inogen expects direct-to-consumer sales to be its fastest growing channel and domestic business-to-business sales to rise significantly in 2018. Internationally as well, business-to-business sales are expected to register solid growth on continued focus on European markets.
Adjusted EBITDA for the year is expected between $65 million and $69 million, up from $62-$67 million, representing 27.9% to 35.7% year-over-year growth.
Headwinds
However, Inogen’s rental revenues represented 5.4% of total sales in the second quarter of 2018. Notably, rental revenues totaled $5.3 million, reflecting a decline of 13.1% year over year. Moreover, management expects rental revenues to decline around 10% in 2018 from 2017.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical ISRG, Integer Holdings Corporation ITGR and The Cooper Companies, Inc. COO.
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings’ long-term earnings growth rate is projected at 15%. The stock flaunts a Zacks Rank #1.
Cooper Companies has an expected long-term earnings growth rate of 10.8%. The stock carries a Zacks Rank #2.
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