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Inogen (INGN) Q1 Earnings Beat Estimates, Revenues Lag

Inogen, Inc. INGN incurred an adjusted loss per share of 63 cents for first-quarter 2023, wider than the adjusted loss per share of 38 cents in the year-ago period. However, the figure was narrower than the Zacks Consensus Estimate of a loss of 77 cents per share.

Our projection of adjusted loss per share was 60 cents.

GAAP loss per share for the quarter was 88 cents, wider than the year-earlier loss of 62 cents per share.

Revenues in Detail

Inogen registered revenues of $72.2 million for the first quarter, down 10.2% year over year. The figure lagged the Zacks Consensus Estimate by 2.8%.

On a constant-currency basis, total revenues for the reported quarter decreased 8.5%.

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The first-quarter revenues compare to our estimate of $74.9 million.

Per management, the year-over-year decrease in the top line primarily resulted from a decrease in direct-to-consumer sales and international business-to-business sales. However, this was partially offset by higher domestic business-to-business sales and rental revenues.

Segmental Details

Inogen derives revenues from two sources — rental and sales.

Rental revenues for the reported quarter grossed $16.3 million, up 25.4% from the year-ago period. Per management, continued progress on rental strategy led to the increase in rental revenues, primarily driven by higher rental patients on service and higher reimbursement rates.

This figure compares to our Rental revenues’ first-quarter projection of $10.7 million.

Sales revenues were $55.9 million, down 17.1% from the prior-year quarter. This figure compares to our Sales revenues’ first-quarter projection of $64.2 million.

Revenues by Region & Category

Domestic business-to-business sales for first-quarter 2023 amounted to $12.6 million, up 146.7% on a year-over-year basis. Our projection for the same was $6.7 million.

International business-to-business sales for the reported quarter amounted to $18.9 million, down 32.1% year over year on a reported basis. Our model estimate for the metric was $20.6 million.

Domestic direct-to-consumer sales decreased 29.2% year over year to $24.3 million for the quarter. Our estimate for the same was $36.9 million.

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

Margins

For the quarter under review, Inogen’s gross profit fell 12.2% from the year-ago period to $30.7 million. The gross margin contracted 96 basis points to 42.6%.

We had projected 49.5% of gross margin for the first quarter.

Sales and marketing expenses increased 1.4% from the year-ago quarter to $28.4 million. Research and development expenses decreased 0.4% year over year to $5.3 million, while general and administrative expenses increased 24.2% to $18.9 million. Adjusted operating expenses of $52.6 million increased 8.3% year over year.

Adjusted operating loss totaled $21.9 million compared with the prior-year quarter’s adjusted operating loss of $13.6 million.

Financial Position

Inogen exited first-quarter 2023 with cash and cash equivalents of $164.1 million compared with $187 million at the end of 2022.

The company ended the quarter with no debt on its balance sheet.

Net cash used in operating activities at the end of first-quarter 2023 was $6.3 million compared with $18.1 million a year ago.

Guidance

Inogen has not provided any outlook for the second quarter of 2023 or the full year.

Our Take

Inogen exited the first quarter of 2023 with better-than-expected earnings. The robust year-over-year uptick in rental revenues and domestic business-to-business sales was impressive.

Management confirmed that Inogen had increased total covered lives to approximately 160 million, with the recent additions of two large private healthcare payers supporting its prescriber channel and overall rental strategy. Management also stated that the company will be granted reimbursement for Rove 6 in France. These developments look promising for the stock.

Yet, dismal year-over-year top-line and bottom-line performances were worrying. A decline in international business-to-business and domestic direct-to-consumer sales was concerning as well. The contraction of gross margin is worrying. Inogen continued to incur operating losses in the first quarter.

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 are AmerisourceBergen Corporation ABC, Intuitive Surgical, Inc. ISRG and Cardinal Health, Inc. CAH.

AmerisourceBergen, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted earnings per share (EPS) of $3.50, beating the Zacks Consensus Estimate by 6.4%. Revenues of $63.46 billion outpaced the consensus mark by 4.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AmerisourceBergen has a long-term estimated growth rate of 8.7%. ABC’s earnings surpassed estimates in all the trailing four quarters, the average being 3.1%.

Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.

Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.

Cardinal Health reported third-quarter fiscal 2023 adjusted EPS of $1.74, beating the Zacks Consensus Estimate by 17.6%. Revenues of $50.49 billion surpassed the Zacks Consensus Estimate by 1.7%. It currently carries a Zacks Rank #2.

Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.

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Inogen, Inc (INGN) : Free Stock Analysis Report

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