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Inogen (INGN) Down 17.5% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
·3 mins read

It has been about a month since the last earnings report for Inogen (INGN). Shares have lost about 17.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Inogen's Q2 Earnings Beat Estimates, Revenues Miss

Inogen, Inc. reported second-quarter 2020 earnings per share  of 12 cents against the Zacks Consensus Estimate of a loss of 8 cents. However, the bottom line fell 73.3% from year-ago quarter.

Revenues of this company came in at $71.7 million, which missed the Zacks Consensus Estimate by 10.1%. On a year-over-year basis, the top line dropped 29.1% mainly due to the impact of the COVID-19 pandemic.

Segmental Details

Revenues at the Sales segment amounted to $65.6 million in the quarter under review, down 31.6% on a year-over-year basis.

Rental revenues grossed $6.1 million, up 16.9%from the year-ago period.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $21.6 million, down 27.3% on a year-over-year basis. Per management, the decline was primarily owing to reduced demand from home medical equipment providers and resellers of portable oxygen concentrators.

Internationally, this segment recorded revenues of $13.9 million, down 38.5% year over year and 37.4% at constant currency. Per management, the decline was primarily led bytemporary shutdown of certain European respiratory assessment centers due to the COVID-19 pandemic and continued tender delays in few European markets.

Direct-to-consumer revenues fell 30.9% year over year to $30.2 million in the quarter. Sales were adversely impacted by the COVID-19 public health emergency (PHE) due to the lack of mobility from government mandated stay-at-home initiatives and economic uncertainty.

Margins

In the second quarter, gross profit was $32.7 million, down 34.8% year over year. Gross margin came in at 45.7%, down a significant 400 basis points (bps).

Loss from operations in the quarter was $2.4 million against the year-ago quarter’s operating profit of $12.1 million.

Guidance

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

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -124.39% due to these changes.

VGM Scores

At this time, Inogen has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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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Zacks Investment Research