Inogen (INGN) Stock Surges 16.5% Despite Q4 Earnings Miss
Shares of Inogen, Inc. INGN rose 16.5% till Feb 28, following the company's fourth-quarter 2021 results announcement on Feb 24.
The company incurred a loss per share of $1.01 for fourth-quarter 2021, wider than the loss of 23 cents in the year-ago period. The figure was also wider than the Zacks Consensus Estimate of a loss of 74 cents per share.
Full-year loss per share was 28 cents, wider than the loss of 27 cents at 2020-end. The figure was also wider than the Zacks Consensus Estimate of a loss of 2 cents per share.
Revenues in Detail
Inogen registered revenues of $76.4 million for the fourth quarter, up 3.3% year over year. The figure, however, marginally missed the Zacks Consensus Estimate by 0.04%.
Per management, the year-over-year uptick in the top line was primarily driven by improved average selling prices, sustained demand, and reduced impact of the pandemic and related public health emergency, partially offset by supply chain constraints that primarily limited sales in the domestic business-to-business channels.
Full-year revenues were $358 million, reflecting a 16.1% improvement from the year-ago period. The metric also surpassed the Zacks Consensus Estimate by 0.3%.
Segmental Details
Inogen derives revenues from two sources — rental revenues and sales revenues.
Rental revenues for the reported quarter grossed $13 million, up 39.4% from the year-ago period on the back of increased patients on service, higher Medicare reimbursement rates and billable patients as a percent of total patients on service.
As of Dec 31, 2021, Inogen had approximately 42,900 patients on service, up 33.2% from the corresponding period of 2020.
Sales revenues were $63.4million, down 1.9% from the prior-year quarter.
Total physician sales representative headcount as of Dec 31, 2021 was 35, up 45.8% from the comparable period of 2020.
Inogen, Inc. Price, Consensus and EPS Surprise
Inogen, Inc. price-consensus-eps-surprise-chart | Inogen, Inc. Quote
Revenues by Region & Category
Domestic business-to-business sales for fourth-quarter 2021 amounted to $10.3 million, down 57.6% on a year-over-year basis due to supply chain constraints that limited product availability in this channel.
International business-to-business sales for the reported quarter amounted to $20.1 million, up 47.6% year over year on a reported basis and 50% at a constant exchange rate. Per management, increased ambulation of patients in Europe and improving operational capacity of certain European respiratory assessment centers closer to normal levels contributed to the upside. This was partially offset by supply chain constraints that limited product availability in this channel.
Domestic direct-to-consumer sales increased 23.3% year over year to $33 million for the quarter, primarily driven by higher average selling prices than the comparable prior-year period.
Margins
For the quarter under review, Inogen’s adjusted gross profit rose 15.2% from the year-ago period to $41.2 million. Adjusted gross margin also expanded 558 basis points to 53.9%.
Sales and marketing expenses rose 17% from the year-ago quarter to $29.7 million. Research and development expenses went up 27.5% year over year to $4.7 million, while general and administrative expenses increased 3.4% to $10.9 million. Adjusted operating expenses of $45.3 million increased 14.4% year over year.
Adjusted operating loss totaled $4.1 million compared with the prior-year quarter’s adjusted operating loss of $3.8 million.
Financial Position
Inogen exited full-year 2021 with cash and cash equivalents of $235.5 million compared with $211.9 million at 2020-end.
The company ended the year with no debt on its balance sheet.
Cumulative net cash flow from operating activities at the end of full-year 2021 was $23.6 million compared with $37 million a year ago.
Guidance
Due to the persistent uncertainty in the business on account of supply chain disruptions, higher cost of critical components, and the impact and scope of the COVID-19 pandemic, the company refrained from providing a full-year outlook yet.
Nonetheless, Inogen expects total revenues for the first quarter of 2022 to be similar to fourth-quarter 2021. The Zacks Consensus Estimate for the same is currently pegged at $76.5 million.
The company also expects full-year 2022 revenue growth in the mid-single-digit range. The Zacks Consensus Estimate for the same is currently pegged at $365.8 million.
Our Take
Inogen came up with tepid results for the fourth quarter of 2021. A dismal year-over-year bottom-line performance is worrying. A decline in sales revenues and lower domestic business-to-business sales for the quarter are concerning as well. Inogen incurred operating loss for the fourth quarter, which does not bode well. The company’s non-issuance of any detailed financial outlook for the year raises apprehension as well.
Yet, a robust year-over-year uptick in the overall top line and solid rental revenues are impressive. Strength in international business-to-business and domestic direct-to-consumer sales is encouraging. The expansion of adjusted gross margin bodes well for the company. Inogen inked an agreement with contract sales organization Ashfield Healthcare, LLC to enhance its go-to-market capabilities in the prescriber channel, which further raises optimism on the stock.
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 include AMN Healthcare Services, Inc. AMN, Allscripts Healthcare Solutions, Inc. MDRX and Henry Schein, Inc. HSIC.
AMN Healthcare, currently flaunting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted EPS of $2.95, which beat the Zacks Consensus Estimate by 14.3%. Revenues of $1.36 billion also outpaced the consensus mark by 0.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in all the trailing four quarters, with the average being 20%.
Allscripts, presently sporting a Zacks Rank #1, reported fourth-quarter 2021 adjusted EPS of 79 cents, which beat the Zacks Consensus Estimate by 154.8%. Revenues of $391.7 million also outpaced the consensus mark by 0.1%.
Allscripts has an estimated long-term growth rate of 16.3%. MDRX’s earnings surpassed estimates in the trailing four quarters, with the average being 64.8%.
Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion also outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #2 (Buy).
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, with the average being 25.5%.
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