Inogen Inc. INGN recently provided an update to its full-year 2016 guidance. The company now projects adjusted EBITDA in the range of $35–$37 million, representing an approximate increase of 14.8% to 21.3% over the 2015 guidance mid-point of $30.5 million.
Meanwhile, Inogen reiterated its full-year 2016 revenue guidance, which is now pegged in the range of $177–$183 million, reflecting 16.8% to 20.8% growth over the 2015 guidance mid-point of $151.5 million. The company expects net income of $11–$13 million, which represents 18.9% to 40.5% growth over the 2015 guidance mid-point of $9.25 million.
Inogen forecasts net positive cash flow for full-year 2016 with no additional equity capital required to meet its current plan.
The full-year 2016 guidance reflects Inogen’s growing confidence on the growth prospects of its portable oxygen containers (POC). New products like Inogen At Home along with the upcoming Inogen One G4 are expected to drive growth.
Inogen reported an impressive third quarter of 2015, with earnings of 13 cents per share increasing 18.2% on a year-over-year basis. Revenues jumped 38.7% year over year to $40.8 million. Sales revenue surged 50.6% to $29.2 million, while rental revenues increased 15.7% to $11.5 million.
The upside can be mainly attributed to better-than-expected growth in Inogen’s domestic and international business-to-business sales. Rising patient demand along with brand awareness of the company’s direct-to-consumer channel also paved the way to higher revenues.
Inogen also maintained its previously announced full-year 2015 guidance wherein revenues are estimated in the band of $150–$153 million, reflecting year-over-year growth of 33.3–36%. An increase in global business-to-business revenues has encouraged management to raise the projection.
Adjusted EBITDA is expected in the range of $29–$32 million, reflecting year-over-year increase of 21.1%–33.6%. Meanwhile, the net income guidance of $8.5 million to $10 million reflects an increase of 24.5% to 46.5% over 2014.
Inogen continues to anticipate net positive cash flow for full-year 2015 with no added equity capital necessary for meeting its current plan.
We believe Inogen’s unique direct-to-customer business model, innovative product portfolio and growing patient base will likely drive significant top-line growth in the long run. Expansion of the company’s direct-to-consumer network and an increase in the business-to-business distribution, both domestic and international, will open up multiple avenues.
However, foreign exchange volatility, pricing pressure and unfavorable product mix are significant headwinds.
Zacks Rank & Key Picks
Inogen carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical sector include Masimo Corp MASI, Natus Medical BABY and Fluidigm FLDM. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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