Inogen Secures New Direct-to-Consumer Business Facility
Medical technology company Inogen, Inc. INGN announced that it has secured a new business facility in the Cleveland, OH area. The facility would focus toward the direct-to-consumer line of business.
Stock Performance
Inogen has had an impressive run on the bourse on a year-to-date basis. The stock has gained roughly 35.89%, which is higher than the Zacks categorized Medical instruments sub-industry’s addition of almost 17.89%.
The current level compares favorably with the S&P 500’s return of 11.19% over the same time frame. This, together with a long-term expected earnings growth rate of 17.50%, instills confidence in investors.
The estimate revision for the stock has been quite favorable. The year has seen five estimates move north over the last two months, compared with no movement in the opposite direction. As a result, the full year estimates jumped 6.80% to $1.10 over the same time frame. Inogen currently holds a Zacks Rank #1 (Strong Buy).
Coming back to the news, we feel Inogen’s choice of Cleveland for its new facility would allow access to large area of recruitment across northeastern OH. This will facilitate the continued expansion of the company’s direct-to-consumer sales force. As of Dec 31, 2016, the direct-to-consumer sales force consisted of 177 sales representatives located in Inogen’s Goleta, CA and Richardson, TX facilities. In addition to sales representatives, the facility will also include customer service and support functions.
We feel that the choice of a new facility apart from tapping a prime labor market and a physical presence in the eastern time zone, Inogen has secured tax benefits from state and local governments. Tax benefits secured were $1.9 million to be received over the next three years based on forecasted headcount additions and tenant improvement costs.
Inogen is a leading manufacturer of portable oxygen concentrators or POCs that serve patients with obstructive pulmonary disease. Inogen’s expanding product portfolio is a key growth catalyst. Apart from Inogen One G3 and G2 concentrators, the company offers Inogen ‘At Home stationary oxygen concentrator’ which helps it to address the needs of non-ambulatory patients.
Key Picks
Better-ranked stocks in the broader medical sector include Luminex Corporation LMNX, Edwards Lifesciences Corp. EW and Accelerate Diagnostics, Inc AXDX. Luminex sports a Zacks Rank #1, while Edwards Lifesciences and Accelerate Diagnostics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 7.1% over the last three months.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.6%. The stock has a solid one-year return of around 13.6%.
Accelerate Diagnostics projects long-term adjusted earnings growth of almost 30%. The stock returned 30.9% over the last one year.
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