Inogen (INGN) Reiterates 2014 Guidance, Initiates for 2015 - Analyst Blog

Home care oxygen therapy provider Inogen, Inc. (INGN) highlighted the company's future growth drivers at its Analyst/Investor Day held on Dec 15, 2014 in New York. Inogen provided a review of its product pipeline and shed light on the company's financial goals for 2015.

In addition to a general business update, the company covered an overview of market dynamics based on 2013 Medicare data and the prospects presented by the oxygen therapy market.

Inogen views oxygen therapy as a large and growing market opportunity estimated to include 2.5 to 3 million patients in the U.S., which makes the market worth about $3 to $4 billion. Moreover, oxygen patient population is estimated to grow 7%–10% annually between 2013 and 2019. Notably, portable oxygen concentrators (POCs) continue to be the fastest growing oxygen equipment segment in the U.S.

In 2013, Inogen was the leading POC supplier in the U.S. for Medicare patients. With the company garnering better-than-expected results from its direct-to-consumer (DTC) sales strategy shift, as well as an increase in domestic business-to-business (B2B) sales, 2014 also builds on the previous year's momentum.

Inogen has reaffirmed its 2014 guidance, with revenues projected in the $106–$110 million band, adjusted EBITDA in the range of $21.5 million to $23 million, and net income between $5.5 million and $6 million.

2015 Outlook

For 2015, total revenue is expected in the range of $130–$135 million, representing 20%–25% growth over the 2014 guidance mid-point of $108 million.

Inogen expects DTC sales to grow more than 30% year over year. Domestic B2B sales and DTC rentals are expected to grow at a pace of more than 20% year over year. Meanwhile, the international segment is expected to grow over 5% year over year.

Inogen projects 2015 Adjusted EBITDA in the band of $27–$30 million while adjusted net income is projected in the range of $8–$9.5 million. The company expects positive cash flow for the year with no additional equity capital required to meet its current plan.

Going forward, Inogen sees multiple avenues to drive growth in 2015, including the expansion of its DTC network and an increase in the B2B distribution, both domestic and international. New products such as Inogen At Home, which was launched in Oct 2014, along with Inogen One G4 are expected to drive further growth.

Inogen's shares rose as much as 5.3% in the trading session following the announcement.

Inogen, which faces intense competition from the likes of Invacare Corp. (IVC), Koninklijke Philips (PHG) and Chart Industries, Inc. (GTLS), currently carries a Zacks Rank #2 (Buy).