It has been about a month since the last earnings report for Inogen (INGN). Shares have lost about 6.8% 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 drivers.
Inogen Earnings Miss Estimates in Q1, Rental Sales Down Y/Y
Inogen reported first-quarter 2019 earnings per share of 24 cents, which missed the Zacks Consensus Estimate of 29 cents. The bottom line plunged 50% year over year.
Revenues of the company came in at $90.2 million, which trumped the Zacks Consensus Estimate of $89.2 million. On a year-over-year basis, the top line climbed 14.1%.
Sales revenues amounted to $84.8 million in the quarter under review, up 15.3% on a year-over-year basis.
Rental revenues totaled $5.4 million, down 1.5% year over year.
Revenues by Region and Category
Business-to-business revenues in the United States summed $26.1 million, down 7% on a year-over-year basis. Internationally, this segment recorded revenues of $19.8 million, up 17.1% on continued adoption from the company’s European partners.
Direct-to-consumer revenues in the United States grossed $39 million in the quarter under review. This reflects an increase of 35.9% from the prior-year quarter. The upside can be attributed to continued adoption by traditional home medical equipment providers and Internet resellers. Direct-to-consumer domestic rentals recorded net revenues of $5.4 million, down 1.5% year over year.
In the quarter under review, gross profit was $44.4 million, up 17.7% year over year. Gross margin came in at 49.2%, which expanded 150 basis points (bps).
Operating income was $4.9 million, down 44.2% year over year. Operating margin came in at 5.4% of net revenues, significantly down from 11% in the prior-year quarter.
2019 View Lowered
Inogen lowered its revenue guidance for 2019. Revenues are now expected between $405 million and $415 million, compared with the previously stated band of $430 million and $440 million, suggesting 13.1-15.9% growth over 2018.
The company still expects international business-to-business sales to have a solid growth rate, but now expects domestic business-to-business sales to be slightly soft.
Inogen also lowered its full-year GAAP net income guidance to $36-$38 million from the earlier $40-$44 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -14.97% due to these changes.
At this time, Inogen has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, 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.
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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