Analysts Have Been Trimming Their Inogen, Inc. (NASDAQ:INGN) Price Target After Its Latest Report

A week ago, Inogen, Inc. (NASDAQ:INGN) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenues and losses per share were both better than expected, with revenues of US$82m leading estimates by 3.4%. Statutory losses were smaller than the analystsexpected, coming in at US$0.25 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the four analysts covering Inogen are now predicting revenues of US$353.4m in 2025. If met, this would reflect a reasonable 4.0% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$1.11. Before this latest report, the consensus had been expecting revenues of US$352.9m and US$1.39 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.

View our latest analysis for Inogen

The consensus price target fell 20% to US$8.00despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Inogen analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$7.00. This is a very narrow spread of estimates, implying either that Inogen is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Inogen's rate of growth is expected to accelerate meaningfully, with the forecast 5.3% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 0.02% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.1% per year. So it's clear that despite the acceleration in growth, Inogen is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Inogen's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Inogen's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Inogen going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Inogen has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.