Intrinsic value of Inogen, Inc - INGN

Previous Close

$62.68

  Intrinsic Value

$80.70

stock screener

  Rating & Target

buy

+29%

Previous close

$62.68

 
Intrinsic value

$80.70

 
Up/down potential

+29%

 
Rating

buy

We calculate the intrinsic value of INGN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  35.70
  32.63
  29.87
  27.38
  25.14
  23.13
  21.32
  19.68
  18.22
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.79
  6.61
  6.45
Revenue, $m
  486
  644
  837
  1,066
  1,334
  1,642
  1,992
  2,385
  2,819
  3,295
  3,813
  4,371
  4,968
  5,604
  6,278
  6,989
  7,736
  8,519
  9,337
  10,191
  11,081
  12,007
  12,971
  13,972
  15,013
  16,095
  17,219
  18,387
  19,602
  20,865
Variable operating expenses, $m
  431
  570
  740
  942
  1,178
  1,451
  1,759
  2,105
  2,488
  2,908
  3,362
  3,854
  4,381
  4,942
  5,536
  6,163
  6,822
  7,512
  8,234
  8,987
  9,772
  10,589
  11,438
  12,321
  13,239
  14,193
  15,184
  16,215
  17,286
  18,400
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  431
  570
  740
  942
  1,178
  1,451
  1,759
  2,105
  2,488
  2,908
  3,362
  3,854
  4,381
  4,942
  5,536
  6,163
  6,822
  7,512
  8,234
  8,987
  9,772
  10,589
  11,438
  12,321
  13,239
  14,193
  15,184
  16,215
  17,286
  18,400
Operating income, $m
  55
  74
  97
  124
  155
  192
  233
  280
  331
  387
  450
  516
  587
  662
  742
  826
  914
  1,006
  1,103
  1,204
  1,309
  1,419
  1,532
  1,651
  1,774
  1,901
  2,034
  2,172
  2,316
  2,465
EBITDA, $m
  64
  85
  110
  140
  176
  216
  262
  314
  371
  434
  502
  576
  655
  738
  827
  921
  1,019
  1,122
  1,230
  1,343
  1,460
  1,582
  1,709
  1,841
  1,978
  2,120
  2,268
  2,422
  2,582
  2,749
Interest expense (income), $m
  0
  0
  1
  3
  5
  7
  10
  13
  16
  20
  24
  29
  34
  40
  45
  52
  58
  65
  73
  80
  89
  97
  106
  115
  124
  134
  145
  155
  166
  178
  190
Earnings before tax, $m
  55
  73
  94
  119
  148
  182
  221
  263
  311
  363
  421
  482
  547
  617
  690
  767
  849
  934
  1,023
  1,116
  1,212
  1,313
  1,418
  1,526
  1,639
  1,757
  1,879
  2,006
  2,138
  2,275
Tax expense, $m
  15
  20
  25
  32
  40
  49
  60
  71
  84
  98
  114
  130
  148
  166
  186
  207
  229
  252
  276
  301
  327
  354
  383
  412
  443
  474
  507
  542
  577
  614
Net income, $m
  40
  53
  69
  87
  108
  133
  161
  192
  227
  265
  308
  352
  400
  450
  504
  560
  619
  682
  747
  814
  885
  958
  1,035
  1,114
  1,197
  1,283
  1,372
  1,464
  1,561
  1,661

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  247
  328
  426
  542
  678
  835
  1,013
  1,213
  1,434
  1,676
  1,939
  2,223
  2,527
  2,851
  3,193
  3,555
  3,935
  4,333
  4,749
  5,184
  5,636
  6,108
  6,598
  7,107
  7,636
  8,186
  8,758
  9,352
  9,970
  10,613
Adjusted assets (=assets-cash), $m
  247
  328
  426
  542
  678
  835
  1,013
  1,213
  1,434
  1,676
  1,939
  2,223
  2,527
  2,851
  3,193
  3,555
  3,935
  4,333
  4,749
  5,184
  5,636
  6,108
  6,598
  7,107
  7,636
  8,186
  8,758
  9,352
  9,970
  10,613
Revenue / Adjusted assets
  1.968
  1.963
  1.965
  1.967
  1.968
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
Average production assets, $m
  33
  44
  57
  72
  91
  112
  135
  162
  192
  224
  259
  297
  338
  381
  427
  475
  526
  579
  635
  693
  754
  817
  882
  950
  1,021
  1,094
  1,171
  1,250
  1,333
  1,419
Working capital, $m
  37
  50
  64
  82
  103
  126
  153
  184
  217
  254
  294
  337
  383
  432
  483
  538
  596
  656
  719
  785
  853
  925
  999
  1,076
  1,156
  1,239
  1,326
  1,416
  1,509
  1,607
Total debt, $m
  23
  52
  87
  129
  178
  234
  298
  370
  449
  536
  631
  733
  842
  958
  1,081
  1,211
  1,347
  1,490
  1,640
  1,795
  1,958
  2,127
  2,303
  2,486
  2,676
  2,873
  3,079
  3,292
  3,514
  3,745
Total liabilities, $m
  89
  118
  153
  195
  244
  300
  364
  435
  515
  602
  696
  798
  907
  1,023
  1,146
  1,276
  1,413
  1,556
  1,705
  1,861
  2,023
  2,193
  2,369
  2,551
  2,741
  2,939
  3,144
  3,358
  3,579
  3,810
Total equity, $m
  158
  210
  273
  348
  435
  535
  650
  777
  919
  1,074
  1,243
  1,425
  1,620
  1,827
  2,047
  2,279
  2,522
  2,777
  3,044
  3,323
  3,613
  3,915
  4,229
  4,556
  4,895
  5,248
  5,614
  5,995
  6,391
  6,803
Total liabilities and equity, $m
  247
  328
  426
  543
  679
  835
  1,014
  1,212
  1,434
  1,676
  1,939
  2,223
  2,527
  2,850
  3,193
  3,555
  3,935
  4,333
  4,749
  5,184
  5,636
  6,108
  6,598
  7,107
  7,636
  8,187
  8,758
  9,353
  9,970
  10,613
Debt-to-equity ratio
  0.150
  0.250
  0.320
  0.370
  0.410
  0.440
  0.460
  0.480
  0.490
  0.500
  0.510
  0.510
  0.520
  0.520
  0.530
  0.530
  0.530
  0.540
  0.540
  0.540
  0.540
  0.540
  0.540
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
Adjusted equity ratio
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  40
  53
  69
  87
  108
  133
  161
  192
  227
  265
  308
  352
  400
  450
  504
  560
  619
  682
  747
  814
  885
  958
  1,035
  1,114
  1,197
  1,283
  1,372
  1,464
  1,561
  1,661
Depreciation, amort., depletion, $m
  9
  11
  14
  17
  20
  25
  29
  35
  41
  47
  52
  59
  68
  76
  85
  95
  105
  116
  127
  139
  151
  163
  176
  190
  204
  219
  234
  250
  267
  284
Funds from operations, $m
  49
  64
  82
  104
  129
  158
  190
  227
  267
  312
  360
  412
  467
  526
  589
  655
  725
  797
  874
  953
  1,036
  1,122
  1,211
  1,304
  1,401
  1,501
  1,606
  1,714
  1,827
  1,945
Change in working capital, $m
  10
  12
  15
  18
  21
  24
  27
  30
  33
  37
  40
  43
  46
  49
  52
  55
  58
  60
  63
  66
  69
  71
  74
  77
  80
  83
  87
  90
  94
  97
Cash from operations, $m
  39
  52
  67
  86
  108
  134
  163
  197
  234
  275
  320
  369
  421
  477
  537
  600
  667
  737
  811
  887
  967
  1,050
  1,137
  1,227
  1,321
  1,418
  1,519
  1,625
  1,734
  1,847
Maintenance CAPEX, $m
  -5
  -7
  -9
  -11
  -14
  -18
  -22
  -27
  -32
  -38
  -45
  -52
  -59
  -68
  -76
  -85
  -95
  -105
  -116
  -127
  -139
  -151
  -163
  -176
  -190
  -204
  -219
  -234
  -250
  -267
New CAPEX, $m
  -9
  -11
  -13
  -16
  -18
  -21
  -24
  -27
  -30
  -32
  -35
  -38
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -63
  -66
  -68
  -71
  -74
  -76
  -79
  -83
  -86
Cash from investing activities, $m
  -14
  -18
  -22
  -27
  -32
  -39
  -46
  -54
  -62
  -70
  -80
  -90
  -100
  -111
  -122
  -133
  -146
  -158
  -172
  -185
  -200
  -214
  -229
  -244
  -261
  -278
  -295
  -313
  -333
  -353
Free cash flow, $m
  26
  34
  45
  59
  75
  95
  117
  143
  172
  205
  240
  279
  321
  367
  415
  467
  521
  579
  639
  702
  768
  837
  908
  983
  1,060
  1,140
  1,224
  1,311
  1,401
  1,495
Issuance/(repayment) of debt, $m
  23
  29
  35
  42
  49
  56
  64
  72
  79
  87
  94
  102
  109
  116
  123
  130
  136
  143
  149
  156
  163
  169
  176
  183
  190
  197
  205
  213
  222
  231
Issuance/(repurchase) of shares, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  24
  29
  35
  42
  49
  56
  64
  72
  79
  87
  94
  102
  109
  116
  123
  130
  136
  143
  149
  156
  163
  169
  176
  183
  190
  197
  205
  213
  222
  231
Total cash flow (excl. dividends), $m
  50
  63
  81
  101
  124
  151
  181
  215
  251
  291
  334
  381
  430
  483
  538
  597
  658
  722
  788
  858
  930
  1,006
  1,084
  1,166
  1,250
  1,338
  1,429
  1,524
  1,623
  1,726
Retained Cash Flow (-), $m
  -42
  -52
  -63
  -75
  -87
  -101
  -114
  -128
  -142
  -155
  -169
  -182
  -195
  -207
  -220
  -232
  -244
  -255
  -267
  -278
  -290
  -302
  -314
  -327
  -339
  -353
  -366
  -381
  -396
  -412
Prev. year cash balance distribution, $m
  194
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  203
  12
  18
  26
  37
  50
  67
  87
  110
  136
  165
  199
  235
  275
  319
  365
  414
  466
  522
  580
  640
  704
  770
  839
  911
  985
  1,063
  1,143
  1,227
  1,314
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  194
  11
  16
  21
  29
  37
  45
  54
  63
  71
  79
  85
  89
  92
  94
  93
  90
  86
  80
  74
  66
  58
  50
  43
  35
  29
  23
  18
  13
  10
Current shareholders' claim on cash, %
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7

Inogen, Inc. is a medical technology company. The Company develops, manufactures and markets portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. The Company's Inogen One systems concentrate the air around the patient to offer a single source of supplemental oxygen anytime, anywhere with a portable device. Its three portable product offerings, the Inogen One G4, Inogen One G3 and Inogen One G2, at approximately 2.8, 4.8 and 7.0 pounds with a single battery, respectively. Its Inogen One G4, Inogen One G3 and Inogen One G2 are sub-3, sub-5 and sub-10 pound portable oxygen concentrators, respectively. All of its Inogen One systems are equipped with Intelligent Delivery Technology. The Inogen At Home stationary oxygen concentrator allows it to access the non-ambulatory oxygen patient market and serves as a backup to its Inogen One system for ambulatory patients on its rental service.

FINANCIAL RATIOS  of  Inogen, Inc (INGN)

Valuation Ratios
P/E Ratio 60.9
Price to Sales 6.3
Price to Book 7
Price to Tangible Book
Price to Cash Flow 41.2
Price to Free Cash Flow 44.1
Growth Rates
Sales Growth Rate 27.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -7.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 11.2%
Ret/ On Assets - 3 Yr. Avg. 8.5%
Return On Total Capital 13.3%
Ret/ On T. Cap. - 3 Yr. Avg. 10.1%
Return On Equity 13.3%
Return On Equity - 3 Yr. Avg. 10.3%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 47.8%
Gross Margin - 3 Yr. Avg. 48.4%
EBITDA Margin 18.2%
EBITDA Margin - 3 Yr. Avg. 18.6%
Operating Margin 11.3%
Oper. Margin - 3 Yr. Avg. 10.2%
Pre-Tax Margin 11.3%
Pre-Tax Margin - 3 Yr. Avg. 9.9%
Net Profit Margin 10.3%
Net Profit Margin - 3 Yr. Avg. 8%
Effective Tax Rate 8.7%
Eff/ Tax Rate - 3 Yr. Avg. 19.6%
Payout Ratio 0%

INGN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INGN stock intrinsic value calculation we used $358 million for the last fiscal year's total revenue generated by Inogen, Inc. The default revenue input number comes from 0001 income statement of Inogen, Inc. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our INGN stock valuation model: a) initial revenue growth rate of 35.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for INGN is calculated based on our internal credit rating of Inogen, Inc, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Inogen, Inc.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of INGN stock the variable cost ratio is equal to 88.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for INGN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Inogen, Inc.

Corporate tax rate of 27% is the nominal tax rate for Inogen, Inc. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the INGN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for INGN are equal to 6.8%.

Life of production assets of 2.5 years is the average useful life of capital assets used in Inogen, Inc operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for INGN is equal to 7.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $310.424 million for Inogen, Inc - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 21.867 million for Inogen, Inc is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Inogen, Inc at the current share price and the inputted number of shares is $1.4 billion.

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