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Inogen (INGN) Stock Inches Up 0.5% Post Q1 Earnings Beat

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Shares of Inogen, Inc. INGN rose 0.5% till May 12, following the company's first-quarter 2022 results announcement on May 5.

The company incurred an adjusted loss per share of 38 cents for first-quarter 2022, against the adjusted earnings per share (“EPS”) of 14 cents in the year-ago period. The figure was narrower than the Zacks Consensus Estimate of a loss of 48 cents per share.

GAAP loss per share for the quarter was 62 cents, wider than the year-earlier loss of 3 cents per share.

Revenues in Detail

Inogen registered revenues of $80.4 million for the first quarter, down 7.5% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 5.1%.

Per management, the year-over-year decline in the top line was primarily due to supply chain constraints that resulted in limited sales in Inogen’s domestic business-to-business channel.

Segmental Details

Inogen derives revenues from two sources — rental and sales.

Rental revenues for the reported quarter grossed $12.9 million, up 31.8% from the year-ago period on the back of increased patients on service and higher Medicare reimbursement rates.

As of Mar 31, 2022, Inogen had approximately 43,200 patients on service, up 24.5% from the corresponding period in 2021.

Sales revenues were $67.4 million, down 12.6% from the prior-year quarter.

Revenues by Region & Category

Domestic business-to-business sales for first-quarter 2022 amounted to $5.1 million, down 83.4% on a year-over-year basis due to supply constraints and strategic sales channel optimization decisions.

International business-to-business sales for the reported quarter amounted to $27.9 million, up 77.7% year over year on a reported basis and 86.8% at constant exchange rate. This surge primarily resulted from a strategic decision to prioritize that market to fulfill existing demand ahead of the EU MDD (Medical Devices Directive) certificate expiry as Inogen progresses the ongoing regulatory filings to secure the necessary MDR (Medical Devices Regulation) certificates for later in 2022.

Domestic direct-to-consumer sales increased 12.2% year over year to $34.4 million for the quarter, primarily driven by increased average selling prices compared with the year-ago quarter.

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 adjusted gross profit fell 9.9% from the year-ago period to $37.6 million. Adjusted gross margin contracted 121 basis points to 46.8%.

Sales and marketing expenses rose 9.9% from the year-ago quarter to $28 million. Research and development expenses went up 33.6% year over year to $5.4 million, while general and administrative expenses increased 21.5% to $15.2 million. Adjusted operating expenses of $48.6 million increased 15.7% year over year.

Adjusted operating loss totaled $10.9 million compared with the prior-year quarter’s adjusted operating loss of $0.2 million.

Financial Position

Inogen exited first-quarter 2022 with cash and cash equivalents of $213.4 million compared with $235.5 million at 2021 end.

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

Net cash used in operating activities at the end of first-quarter 2022 was $18.1 million against net cash provided by operating activities of $2.9 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 second quarter of 2022 to improve sequentially and be in line with the comparable 2021 figure. The Zacks Consensus Estimate for the same is currently pegged at $100.6 million.

Our Take

Inogen came up with tepid results for the first quarter of 2022. Dismal year-over-year top- and bottom-line performances are worrying. A decline in sales revenues and lower domestic business-to-business sales for the quarter are concerning as well. Contraction of adjusted gross margin is worrying. Inogen incurred operating loss for the first 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.

Yet, a robust year-over-year uptick in rental revenues is impressive. Strength in international business-to-business and domestic direct-to-consumer sales is encouraging. Inogen’s encouraging progress on its new commercial strategy for the prescriber channel raises our optimism. Positive initial results across Inogen’s contract sales organization, Ashfield, are also promising.

Zacks Rank and Key Picks

Inogen currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. OMCL, AMN Healthcare Services, Inc. AMN and Masimo Corporation MASI.

Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.

AMN Healthcare, sporting a Zacks Rank #1, reported first-quarter 2022 adjusted EPS of $3.49, which beat the Zacks Consensus Estimate by 7.4%. Revenues of $1.55 billion outpaced the consensus mark by 3.7%.

AMN Healthcare has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 15.6%.

Masimo reported first-quarter 2022 adjusted EPS of 93 cents, which surpassed the Zacks Consensus Estimate by 1.1%. Revenues of $304.2 million outpaced the Zacks Consensus Estimate by 3.6%. It currently carries a Zacks Rank #2.

Masimo has an earnings yield of 3.8% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average surprise being 4.4%.


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