Failure to submit its annual report by the Mar 31, 2015 deadline has prompted Inogen Inc. INGN to declare that it will file a Form 12b-25 Notification of Late Filing with the U.S. Securities and Exchange Commission (SEC). The filing will provide Inogen with an additional 15 calendar days to file its Form 10-K for the year ended Dec 31, 2014.
Inogen was unable to file its Form 10-K by the scheduled date because of an ongoing internal investigation regarding certain potential accounting matters that were discovered by management during the first quarter of 2015. The Audit Committee, with the assistance of independent advisors, is currently investigating whether there were any violations of the company's accounting policies associated with these potential accounting matters.
Consequently, Inogen is not in a position to file its Form 10-K until after the completion of the Audit Committee's investigation. However, it expects to be able to meet the extended deadline of Apr 15, 2015.
Inogen had first revealed this development on Mar 11, 2015, when it also announced the postponement of its fourth quarter and fiscal 2014 earnings release which had been initially scheduled for Mar 12, 2015. We note that shares of Inogen have tumbled nearly 14% since then to eventually close at $31.99 yesterday.
However, the company’s shares have yielded an impressive year-to-date return of about 92%. Moreover, Inogen remains confident about its strategy, top-line growth and profitability and does not believe that these matters will impact the company's previously stated outlook for fiscal 2015 or its long-term business plans.
Per the company’s third-quarter earnings release on Nov 11, 2014, the total revenue guidance for 2015 ranges from $130–$135 million. This represents roughly 20%–25% growth over the 2014 guidance mid-point of $108 million.
In our opinion, Inogen’s unique direct-to-customer (DTC) business model, innovative product portfolio and growing patient base will drive significant top-line growth in the long run. Increasing international sales and expansions will also boost revenues.
Moreover, this Goleta, CA-based company, which offers innovative respiratory products for use in the homecare setting, has witnessed upward estimate revision over the last 30 days which lifted its Zacks Consensus Estimate for fiscal 2015 by 4.8% to its current level of 44 cents a share.
Also, it is worth mentioning that the company’s long-term expected earnings growth rate stands higher at 21% compared with industry growth of 18%.
Stocks to Consider
Currently, Inogen sports a Zacks Rank #1 (Strong Buy). Other favorably-ranked stocks in the medical instruments industry include Abiomed ABMD, Edwards Lifesciences EW and Fluidigm Corp FLDM. All three stocks carry a Zacks Rank #2 (Buy).
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