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Why Is Inogen (INGN) Down 9.4% 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 9.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Inogen Q4 Earnings and Revenues Surpass Estimates

Inogen reported fourth-quarter 2020 loss per share of 23 cents, narrower than the Zacks Consensus Estimate of a loss of 28 cents. Notably, the company had reported loss per share of 6 cents in the year-ago quarter.

For the full-year 2020, the company reported loss per share of 27 cents, narrower than the Zacks Consensus Estimate of a loss of 31 cents. However, the company had reported earnings per share of 94 cents in the year-ago period.

Revenue Details

Revenues of this company amounted to $73.9 million, which beat the Zacks Consensus Estimate by 6.9%. However, the top line declined 6.3% on a year-over-year basis primarily due to the impact of the COVID-19 pandemic.

For the full-year 2020, the company reported $308.5 million, down 14.8% from 2019. The figure surpassed the consensus mark by 1.6%.

Segmental Details

Rental revenues grossed $9.4 million, up 71.7% from the year-ago period.
Sales revenues were $64.6 million, down 12%.

Revenues by Region & Category

Business-to-business revenues in the United States amounted to $24.2 million, up 17.9% on a year-over-year basis. Per management, unfulfilled orders in fourth-quarter 2019 and higher demand for portable oxygen concentrators (“POCs”) contributed to the upside.

Internationally, this segment reported revenues of $13.6 million, down 20.4% year over year and 23.8% at constant currency. Per management, the decline was mainly led by resurgence of COVID-19 cases during the fourth quarter, leading to additional lockdowns in many European countries, and lowering of operating capacity of certain European respiratory assessment centers.

Direct-to-consumer revenues fell 25.2% year over year to $26.8 million in the quarter. Sales declined due to the impact of the COVID-19 pandemic on consumer travel and mobility, lower consumer confidence, and around 6% decline in average inside sales representative headcount and higher focus of its time on new rental setups.

Margins

In the fourth quarter, gross profit was $34.1 million, up 0.4% year over year. Gross margin came in at 46%, up a 310 basis points (bps).

Total operating costs were $39.6 million, up 0.9%.

Loss from operations in the quarter was $5.5 million wider than the year-ago quarter’s loss of $5.3 million.

Cash Position

The company exited the fourth quarter with cash and cash equivalents of $211.9 million, compared with $213.9 million at the end of the third quarter.

Guidance

Due to the uncertainty around the impact and scope of the COVID-19 pandemic on its business, the company has not issued full-year 2021 guidance.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -33.64% due to these changes.

VGM Scores

At this time, Inogen has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 D. 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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