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Inogen (INGN) Stock Loses 26.7% In Spite of Q2 Earnings Beat

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Shares of Inogen, Inc. INGN have lost 26.7% on Aug 5, following the company's second-quarter 2021 results.

The company reported second-quarter 2021 adjusted earnings per share (EPS) of 22 cents, comparing favourably with the Zacks Consensus Estimate of a loss of 13 cents. The bottom line improved 83.3% from the year-ago quarter.

GAAP EPS in the quarter was 23 cents, up 91.7% from the prior-year quarter.

Revenue Details

Revenues were $101.6 million, which beat the Zacks Consensus Estimate by 15.2%. On a year-over-year basis, the top line surged 41.7% driven by robust consumer demand, higher average selling prices in all channels, and lower COVID-19 pandemic-induced impacts.

Segmental Details

Rental revenues grossed $11.3 million, up 85.2% from the year-ago period.

Sales revenues were $90.3 million, up 37.6%.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $27.6 million, up 27.8% on a year-over-year basis. Per management, this upside was driven by higher demand for portable oxygen concentrators (POCs) for both traditional long-term oxygen therapy patients and COVID-19 patients upon hospital discharge, and increased reseller demand.

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

Internationally, this segment recorded revenues of $21.8 million, up 57.3% year over year and 47.8% at constant currency. Per management, higher COVID-19 vaccination rates and increased ambulation of patients in Europe, rise in operational capacity of certain European respiratory assessment centers, and higher sales in India due to the spike in COVID-19 cases in that market contributed to the upside.

Direct-to-consumer revenues increased 35.6% year over year to $40.9 million in the quarter, attributable to higher demand for POCs on the back of higher COVID-19 vaccination rates within the company’s patient pool and easing of COVID-19 restrictions resulting in increased ambulation and improved consumer confidence.

Margins

In the second quarter, gross profit was $50.3 million, up 53.7% year over year. Gross margin came in at 49.6%, up 390 basis points (bps).

Research and development expenses were $4.1 million, up 25.3% from the year-ago quarter. General and administrative expenses amounted to $5.2 million, down 46.3%.

Operating income in the quarter was $11.7 million, against the year-ago quarter’s operating loss of $2.4 million.

Cash Position

The company exited the second quarter of 2021 with cash, cash equivalents and marketable securities of $250 million, up from $233.2 million at the end of the first quarter of 2021.

Guidance

Due to the uncertainty emanating from the impact and scope of the COVID-19 pandemic, the company refrained from providing full-year outlook yet.

Wrapping Up

Inogen ended the second quarter on a strong note, wherein both earnings and revenues beat the consensus mark. The company saw growth in revenues within its segments. In the second quarter, the company witnessed strength across direct-to-consumer, domestic business-to-business and international business-to-business segments. The significant expansion in gross margin is another plus. The company delivered record revenues in the quarter under review.

However, increase in operating expenses remains a concern.

Zacks Rank and Other Key Picks

Currently, Inogen carries a Zacks Rank of 3 (Hold). Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Encompass Health Corporation EHC, West Pharmaceutical Services, Inc. WST and DENTSPLY SIRONA Inc. XRAY, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Encompass Health reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%.

DENTSPLY SIRONA reported second-quarter 2021 adjusted EPS of 71 cents, which beat the Zacks Consensus Estimate by 9.2%. Second-quarter revenues of $1.07 billion outpaced the consensus mark by 6.9%.


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