Inogen, Inc. INGN is well-poised for growth in the coming quarters, courtesy of high prospects in the portable oxygen concentrator (POC) space. The optimism, led by solid fourth-quarter 2024 performance and a strong product portfolio, seems justified. However, issues like stiff competition and forex volatility are major downsides.
The Zacks Rank #3 (Hold) company’s shares have lost 19.1% so far this year compared with 0.1% decline of the industry. The S&P 500 has decreased 2.2% during the same time frame.
The renowned provider of POCs has a market capitalization of $205.9 million. The company projects 7.2% earnings growth for 2025 and expects to witness continued improvements in its business going forward. Inogen’s P/S ratio of 0.6X compared with the industry’s 2.5X makes its valuation attractive.
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Let us delve deeper.
Huge Prospects in the POC Space: We are optimistic about POCs’ superiority over conventional oxygen therapy (known as the delivery model). Inogen primarily develops, manufactures and markets innovative POCs to provide supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions.
The company showed strong prospects in the POC (Portable Oxygen Concentrator) market, driven by more than 20% year-over-year business-to-business (B2B) channel growth for the third consecutive quarter during the fourth quarter. This was due to increasing recognition of the benefits of Inogen's solutions, including quality, ease of servicing and long service life. Per a report by Markets And Markets, the POCs market was valued at $15.05 billion in 2024 and is anticipated to reach $22.63 billion by 2029 at a CAGR of 8.5%.
Product Portfolio: We are optimistic about Inogen’s expanding product portfolio. The company launched the lightest POC in the market, Rove 4, in October 2024. The device has advanced features such as 840 milliliters of medical-grade oxygen per minute and up to 5 hours and 45 minutes of battery life. Early adoption appears promising, especially for identifying patients earlier in their disease state and enabling potential upgrades.
The company believes that Rove 4 will significantly boost the top line in 2025. INGN also received FDA clearance for Simeox in December 2024 to market the device and meet the various needs of patients with chronic respiratory diseases in the United States.
Additionally, in January 2025, Inogen announced a strategic collaboration with Yuwell, a global home healthcare medical device manufacturer. This partnership aims to broaden Inogen's product portfolio through the distribution of certain respiratory products in the United States and select other territories, enhance its innovation pipeline through R&D collaboration, and facilitate its entry into the Chinese market.
Strong Q4 Results: Inogen reported strong fourth-quarter results last month. Its fourth-quarter revenues gained 5.5% year over year. Full-year 2024 revenues totaled $335.7, up 6.4% from the 2023 level. In the quarter under review, Inogen’s adjusted gross profit rose 25.4% from the year-ago level to $39.3 million. The adjusted gross margin expanded 777 basis points to 49.1%.
Per management, the year-over-year uptick in the top line was primarily driven by higher demand and new customer gains across the domestic and international business-to-business channels. However, this was partially offset by lower direct-to-consumer sales and rental revenues.
Risks
Seasonality Impact: The first quarter of 2025 is expected to be seasonally weaker, particularly in the DTC channel, with anticipated difficulties in generating leads and increased advertising challenges. Moreover, the DTC channel experienced revenue decline due to operating with a smaller, streamlined sales team, a trend that is likely to have further hurt INGN’s first-quarter performance.
Forex Volatility: The foreign market accounts for a sizeable amount of the company’s income. Management anticipates overseas revenues to continue to be erratic due to the distributor's size and timing. In the near future, INGN expects unfavorable foreign exchange rates to hinder revenue growth since the U.S. dollar is increasing compared to the euro and other foreign currencies. Unfavorable forex movement hurt international sales by 330 basis points during the fourth quarter of 2024.
Inogen, Inc Price
Inogen, Inc Price
Inogen, Inc price | Inogen, Inc Quote
Estimate Trend
Inogen has been witnessing a positive estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for its loss per share has narrowed 2.6% to $1.41.
The Zacks Consensus Estimate for 2025 revenues is pegged at $352.8 million, suggesting a 5.1% improvement from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Aveanna Healthcare AVAH.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%. Its shares have risen 4.8% compared with the industry’s 1.2% growth so far this year.
ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.86%.
ResMed’s shares have gained 3.5% compared with the industry’s 10.5% growth so far this year.
Aveanna Healthcare, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 666.7% for 2025. AVAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 135.00%.
Aveanna Healthcare’s shares have declined 19.5% against the industry’s 3.5% growth so far this year.
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