It's been a good week for Inogen, Inc. (NASDAQ:INGN) shareholders, because the company has just released its latest yearly results, and the shares gained 6.8% to US$47.88. It was not a great result overall. While revenues of US$362m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit US$0.94 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
After the latest results, the six analysts covering Inogen are now predicting revenues of US$386.1m in 2020. If met, this would reflect an okay 6.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to tumble 28% to US$0.69 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$388.9m and earnings per share (EPS) of US$1.13 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
The average analyst price target fell 8.6% to US$55.60, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Inogen analyst has a price target of US$80.00 per share, while the most pessimistic values it at US$38.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Further, we can compare these estimates to past performance, and see how Inogen forecasts compare to the wider market's forecast performance. We would highlight that Inogen's revenue growth is expected to slow, with forecast 6.7% increase next year well below the historical 24%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 7.7% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Inogen to grow at about the same rate as the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Inogen. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Inogen's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Inogen analysts - going out to 2023, and you can see them free on our platform here.
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