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Inogen (INGN) Q2 Earnings and Revenues Beat Estimates

·6 min read

Inogen, Inc. INGN incurred an adjusted loss per share of 2 cents for second-quarter 2022, against the adjusted earnings per share (EPS) of 8 cents in the year-ago period. The figure was narrower than the Zacks Consensus Estimate of a loss of 40 cents per share.

Our projection of adjusted loss per share was 41 cents.

GAAP loss per share for the quarter was 15 cents against the year-earlier EPS of 22 cents.

Revenues in Detail

Inogen registered revenues of $103.4 million for the second quarter, up 1.8% year over year. The figure surpassed the Zacks Consensus Estimate by 2.6%.

On a constant-currency basis, total revenue for the reported quarter increased by 3.6%.

The second-quarter revenue compares to our estimate of $101.5 million.

Per management, the year-over-year uptick in the top line was primarily driven by higher international sales and domestic rentals. However, this was partially offset by lower domestic business-to-business sales.

Segmental Details

Inogen derives revenues from two sources — rental and sales.

Rental revenues for the reported quarter grossed $14.1 million, up 25.1% from the year-ago period on the back of increased patients on service and higher Medicare reimbursement rates.

This figure compares to our Rental revenues’ Q2 projection of $11.2 million.

Sales revenues were $89.3 million, down 1.1% from the prior-year quarter.

This figure compares to our Sales revenues’ Q2 projection of $90.4 million.

Revenues by Region & Category

Domestic business-to-business sales for second-quarter 2022 amounted to $11.2 million, down 59.3% on a year-over-year basis.

International business-to-business sales for the reported quarter amounted to $37.4 million, up 71.6% year over year on a reported basis. This surge primarily resulted from prioritized shipment of products in advance of the expiration of the EU MDD (Medical Devices Directive) certificates.

Domestic direct-to-consumer sales decreased 0.7% year over year to $40.6 million for the quarter, primarily due to lower volume resulting from lower sales representative headcount. However, this was offset by an increase in average selling prices.

Inogen, Inc Price, Consensus and EPS Surprise

Inogen, Inc Price, Consensus and EPS Surprise
Inogen, Inc Price, Consensus and EPS Surprise

Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote

Margins

For the quarter under review, Inogen’s gross profit fell 8.1% from the year-ago period to $46.3 million. Gross margin contracted 481 basis points to 44.7%.

We had projected 39% of gross margin for Q2.

Sales and marketing expenses rose 3.7% from the year-ago quarter to $30.4 million. Research and development expenses went up 47.1% year over year to $6.1 million, while general and administrative expenses surged 142.8% to $12.7 million. Operating expenses of $49.1 million increased 27.1% year over year.

Operating loss totaled $2.9 million against the prior-year quarter’s adjusted operating profit of $11.7 million.

Financial Position

Inogen exited second-quarter 2022 with cash and cash equivalents of $223.6 million compared with $213.4 million at the end of first quarter.

The company ended the quarter with no debt on its balance sheet.

Cumulative net cash used in operating activities at the end of second-quarter 2022 was $12.6 million against net cash provided by operating activities of $20.1 million a year ago.

Guidance

Due to persistent uncertainty in the business on account of supply chain disruptions and the ongoing pandemic-induced uncertainty, the company has refrained from providing a full-year outlook yet.

Nonetheless, Inogen expects total revenues for the quarter of 2022 to be in the range of $97 million-$100 million, reflecting 4-7% growth over the comparable 2021 figure. The Zacks Consensus Estimate for the same is currently pegged at $97.9 million.

Our Take

Inogen exited the second quarter of 2022 with better-than-expected results. Robust year-over-year uptick in overall and rental revenues are impressive. Strength in international business-to-business is encouraging. Inogen’s encouraging progress on its new commercial strategy for the prescriber channel raises our optimism. Continued strength across Inogen’s sales capabilities in the direct-to-consumer channel is also promising.

Yet, dismal year-over-year bottom-line performances are worrying. A decline in sales revenues along with lower domestic business-to-business sales and domestic direct-to-consumer sales for the quarter are concerning as well. Contraction of gross margin is worrying. Inogen incurred operating loss for the second quarter, which does not bode well. The company’s non-issuance of any detailed financial outlook for the year raises apprehensions. Sustained supply-chain headwinds and pandemic-induced uncertainties are other areas of concern.

Zacks Rank and Other Key Picks

Inogen currently has a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, AMN Healthcare Services, Inc. AMN and Zimmer Biomet Holdings, Inc. ZBH.

Quest Diagnostics, carrying a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quest Diagnostics has an earnings yield of 6.9% compared with the industry’s 3.8%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.

AMN Healthcare, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $3.31, which beat the Zacks Consensus Estimate by 11.8%. Revenues of $1.43 billion outpaced the consensus mark by 4.8%.

AMN Healthcare has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 15.7%.

Zimmer Biomet reported second-quarter 2022 adjusted EPS of $1.82, which surpassed the Zacks Consensus Estimate by 11.7%. Second-quarter revenues of $1.78 billion outpaced the Zacks Consensus Estimate by 3.5%. It currently has a Zacks Rank #2.

Zimmer Biomet has an estimated long-term growth rate of 5%. ZBH’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 7.4%.


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