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Why Is Inogen (INGN) Down 2.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Inogen (INGN). Shares have lost about 2.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Inogen due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Inogen's Q1 Earnings and Revenues Beat Estimates

Inogen reported first-quarter 2020 loss per share of 7 cents, which was narrower than the Zacks Consensus Estimate of a loss of 10 cents. This compares to earnings of 24 cents in the year-ago quarter.

Revenues came in at $88.5 million, which surpassed the Zacks Consensus Estimate by 6.7%. On a year-over-year basis, the top line dropped 1.9%.

Segmental Details

Revenues at the Sales segment amounted to $83.1 million in the quarter under review, down 2% on a year-over-year basis.

Rental revenues grossed $5.34 million, down 0.7% year over year.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $27.6 million, up 5.7% on a year-over-year basis. Per management, this increase was primarily driven by increased home medical equipment provider demand.

Internationally, this segment recorded revenues of $20 million, up 1.4% year over year and 3.6% at constant currency. Per management, the increase was primarily led by higher demand in Canada and Australia.

Direct-to-consumer revenues fell 8.9% year over year to $35.5 million in the quarter. This was due to an approximate 15% reduction in average sales representative headcount compared to the year-ago quarter.

Margins

In the first quarter, gross profit was $38.4 million, down 13.6% year over year. Gross margin came in at 43.4%, down a significant 588 basis points (bps).

Loss from operations in the quarter was $2.2 million against the year-ago quarter’s operating profit of $4.9 million.

Guidance

Due to uncertainty around impact of the COVID-19 on its business, the company has withdrawn its 2020 guidance, issued on Feb 25.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -119.14% due to these changes.

VGM Scores

At this time, Inogen has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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