Inogen, Inc. INGN has witnessed strong momentum in the past six months period. Shares of the company have surged 46.8% compared with 1.8% growth of the industry. The S&P 500 composite has risen 10% during the same time frame.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.
Headquartered in Goleta, CA, Inogen develops, manufactures, and markets portable oxygen concentrators (POCs) used by patients who suffer from chronic respiratory conditions and need long-term oxygen therapy (LTOT). POCs concentrate the air around the patient, filter out nitrogen and other unwanted substances, and deliver oxygen.
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Catalysts Driving Growth
High Prospects in the POC Space: Inogen is poised for growth due to its innovative POCs, which are superior to conventional oxygen therapy. The proprietary Inogen One and Inogen Rove systems provide supplemental oxygen anytime and anywhere, enhancing patient convenience.
As of Dec. 31, 2023, Inogen had 33 pending patent applications and 87 issued patents related to its respiratory devices, bolstered by the acquisition of Physio-Assist, which added more patents to its portfolio.
Inogen’s products are marketed internationally through distributors and sold directly to patients and prescribers in the United States. The POC market is projected to rise from $1.58 billion in 2022 to $3.03 billion by 2030 at an 8.5% CAGR.
Inogen sold 41,300 systems in the second quarter of 2024, a 21.1% increase year over year, and 75,200 systems in the first half of 2024, a 23.3% rise, which boosted stock performance.
Product Portfolio: Inogen's performance is enhanced by its expanding product portfolio, highlighted by the upcoming launch of Inogen Rove 4 in the third quarter of 2024, which received FDA 510(k) clearance in June. This model features a new flow setting, an eight-year service life and the highest oxygen production, making it the lightest POC on the market.
Additionally, Inogen Rove 6, launched in July 2023 in the United States, offers an eight-year service life. These advancements enhance Inogen’s competitive edge and growth potential in the POC market.
Inogen is focusing on research and development to enhance its oxygen therapy products and maintain market leadership. In the second quarter of 2024, R&D expenses rose 30.8% year over year, representing 6.3% of total revenues, primarily due to the Physio-Assist acquisition and increased product development costs, demonstrating the company’s commitment to innovation.
Strong Q2 Results: Inogen's strong year-over-year growth in domestic and international business-to-business sales enhances optimism for the company. Solid revenues and profits, alongside an expanding adjusted gross margin, are encouraging.
Inogen's strategy focuses on targeting hospitals and individual practitioners via its rental business, improving patient access and extending payment duration. By enhancing scale and efficiency in this channel and reducing sales and marketing expenses post-exit from a third-party relationship, Inogen aims to boost profitability and enhance its stock outlook.
Risk Factor
Stiff Competition: The LTOT market is highly competitive, with Inogen facing challenges from numerous manufacturers and distributors of POCs and other oxygen solutions. Major competitors include Respironics, Invacare and Resmed. As the regulatory path for oxygen therapy devices is relatively simple, Inogen anticipates heightened competition in the industry, which poses a risk for investors.
A Look at Estimates
The Zacks Consensus Estimate for Inogen’s 2024 and 2025 bottom line projects a 56.6% and 13% year-over-year improvement, respectively, to a loss of $1.92 and $1.67 per share.
In the past 30 days, the Zacks Consensus Estimate for the company's 2024 loss has remained unchanged at $1.92 per share.
Revenues for 2024 and 2025 are anticipated to rise 3.6% and 3.8%, respectively, to $326.98 million and $339.53 million on a year-over-year basis.
Inogen, Inc Price
Inogen, Inc price | Inogen, Inc Quote
Other Key Picks
Some other top-ranked stocks in the broader medical space are Tenet HealthCare (THC), ATI Physical Therapy (ATIP) and Aveanna Healthcare AVAH. While Tenet HealthCare carries a Zacks Rank #1 (Strong Buy), ATI Physical Therapy and Aveanna Healthcare carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet HealthCare has an estimated long-term growth rate of 18.3%. THC's earnings surpassed estimates in each of the trailing four quarters, with the average being 58.5%.
Tenet HealthCare has gained 119.9% compared with the industry's 48.6% growth year to date.
ATI Physical Therapy's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.25%.
ATIP's shares have gained 5.5% year to date compared with the industry’s 18.6% growth.
Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 47.5%.
AVAH's shares have surged 104.5% year to date compared with the industry’s 15.7% growth.
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Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
Inogen, Inc (INGN) : Free Stock Analysis Report
Aveanna Healthcare Holdings Inc. (AVAH) : Free Stock Analysis Report
ATI Physical Therapy, Inc. (ATIP) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
