Ingevity (NGVT) AI Stock Analysis

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Ingevity

(NYSE:NGVT)

50Neutral

Ingevity's financial performance is currently a major concern, with declining revenues and high leverage impacting its stability. The technical indicators show bearish momentum, further weighing on the stock. While the company is undervalued based on its P/E ratio, negative earnings and lack of dividends reduce its appeal. However, recent earnings call and corporate events suggest potential for strategic growth and improved operational performance, which could enhance investor sentiment if executed effectively.

Positive Factors

Activist Involvement

The presence of activist Vision One in NGVT provides downside protection and positively skews the risk/reward profile.

Portfolio Repositioning

NGVT has done significant work in repositioning its portfolio, making 2025 a major year of earnings inflection.

Strategic Review

The strategic review of NGVT's PC business could unlock value and drive upside.

Negative Factors

Auto Tariffs

Potential auto-related tariffs could negatively impact the auto segment and modestly impact the stock.

Product Ramp Uncertainty

There is uncertainty regarding the timing of its ramp for AFA products, leading to a neutral risk/reward assessment.

Tariff Exposure

If tariffs are implemented on Mexico/Canada, NGVT would be one of the most exposed companies in our coverage to a related slowdown in auto consumption.

Ingevity (NGVT) vs. S&P 500 (SPY)

Market Cap

$1.22B

Dividend YieldN/A

Average Volume (3M)291.06K

Price to Earnings (P/E)―

Beta (1Y)1.78

Revenue Growth-16.92%

EPS Growth-6107.70%

CountryUS

Employees1,600

SectorBasic Materials

Sector Strength52

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)-11.85

Shares Outstanding36,439,270

10 Day Avg. Volume326,799

30 Day Avg. Volume291,063

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.10

Price to Cash Flow (P/CF)6.00

P/FCF Ratio2.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$44.33

Price Target Upside32.72% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Ingevity Business Overview & Revenue Model

Company DescriptionIngevity Corporation (NGVT) is a global manufacturer specializing in performance-based chemicals and materials. The company operates in two primary segments: Performance Materials and Performance Chemicals. Ingevity's core products include high-performance activated carbon used in automotive applications, as well as specialty chemicals derived from pine-based raw materials, which are utilized in a variety of industries such as pavement technologies, oilfield services, and industrial specialties.

How the Company Makes MoneyIngevity generates revenue through the sale of its performance materials and chemicals. The Performance Materials segment primarily earns income through the production and sale of activated carbon products used in automotive evaporative emission control systems, which help vehicles meet environmental regulations. The Performance Chemicals segment makes money by providing specialty chemicals that enhance the performance of products in applications like pavement, oilfield services, adhesives, agrochemicals, and lubricants. Ingevity's revenue streams are supported by strong customer relationships and a focus on innovation, enabling the company to maintain a competitive edge in its market sectors.

Ingevity Financial Statement Overview

Summary

Ingevity faces a challenging financial situation with declining revenue, profitability pressures, and high leverage. Despite positive free cash flow, the negative net income and high debt levels pose significant risks. The financials suggest the company must address profitability and leverage to stabilize its financial position.

Income Statement

Neutral

The income statement shows a challenging period with declining revenues, a significant negative net income, and negative EBITDA in TTM (Trailing-Twelve-Months). The gross profit margin is stable at 31%, but the company faces a negative net profit margin of -30.6% in TTM, indicating profitability issues. Revenue declined by 16.9% compared to the previous year, showing a negative growth trend.

Balance Sheet

Neutral

The balance sheet reflects high leverage with a debt-to-equity ratio of 7.18 in TTM, indicating potential financial risk. Stockholders' equity decreased significantly, and the equity ratio is low at 9.65%, suggesting limited equity buffer. Although these indicate a risky balance structure, the company maintained a reasonable asset base.

Cash Flow

Neutral

Cash flow analysis presents mixed results. Operating cash flow decreased, but the company generated positive free cash flow of $51 million in TTM. The free cash flow to net income ratio is not meaningful due to negative net income, indicating cash flow resilience despite earnings challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.41B	1.69B	1.67B	1.39B	1.22B
	Gross Profit
454.70M	471.90M	570.10M	512.80M	465.50M
	EBIT
288.00M	288.20M	342.70M	227.30M	297.60M
	EBITDA
-329.50M	224.60M	456.30M	337.20M	397.80M
	Net Income Common Stockholders
-430.30M	-5.40M	211.60M	118.10M	181.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.00M	95.90M	76.70M	275.40M	257.70M
	Total Assets
2.02B	2.62B	2.74B	2.47B	2.33B
	Total Debt
1.45B	1.53B	1.49B	1.25B	1.27B
	Net Debt
1.39B	1.44B	1.41B	974.60M	1.01B
	Total Liabilities
1.83B	1.99B	2.04B	1.80B	1.69B
	Stockholders Equity
195.20M	631.40M	698.30M	673.80M	647.30M
Cash Flow		Free Cash Flow
51.00M	95.30M	170.60M	189.20M	246.50M
	Operating Cash Flow
128.60M	205.10M	313.10M	293.00M	352.40M
	Investing Cash Flow
-79.50M	-77.30M	-553.90M	-140.60M	-110.60M
	Financing Cash Flow
-70.20M	-99.90M	48.10M	-133.10M	-50.20M

Ingevity Technical Analysis

Technical Analysis Sentiment

Negative

Last Price33.40

Price Trends

50DMA

43.29

Negative

100DMA

43.90

Negative

200DMA

41.65

Negative

Market Momentum

MACD

-1.49

Positive

RSI

32.56

Neutral

STOCH

14.91

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGVT, the sentiment is Negative. The current price of 33.4 is below the 20-day moving average (MA) of 39.66, below the 50-day MA of 43.29, and below the 200-day MA of 41.65, indicating a bearish trend. The MACD of -1.49 indicates Positive momentum. The RSI at 32.56 is Neutral, neither overbought nor oversold. The STOCH value of 14.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NGVT.

Ingevity Risk Analysis

Ingevity disclosed 24 risk factors in its most recent earnings report. Ingevity reported the most risks in the “Ability to Sell” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ingevity Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IOSP	65 Neutral	$2.26B	63.42	3.02%	1.72%	-5.31%	-74.42%
SCL	65 Neutral	$1.12B	22.62	4.22%	3.36%	-6.26%	24.94%
MTX	63 Neutral	$1.86B	11.30	9.83%	0.78%	-2.37%	100.91%
CC	53 Neutral	$1.78B	20.74	12.98%	10.44%	-4.05%	―
NGVT	50 Neutral	$1.22B	―	-104.11%	―	-16.92%	-6107.70%
PRM	50 Neutral	$1.51B	―	-0.51%	―	74.16%	-112.26%
Sector *	47 Neutral	$2.43B	-2.83	-21.77%	3.74%	4.16%	-28.83%

* Basic Materials Sector Average

Performance Comparison

NGVT

Ingevity

31.27

-15.61

-33.30%

IOSP

Innospec

86.52

-35.94

-29.35%

MTX

Minerals Technologies

55.85

-16.18

-22.46%

SCL

Stepan Company

47.58

-36.19

-43.20%

Chemours Company

11.88

-14.03

-54.15%

PRM

Perimeter Solutions

9.70

2.34

31.79%

Ingevity Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -27.14% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

Ingevity Corporation demonstrated strong operational improvements and strategic repositioning, resulting in record performance in key segments and improved financial health. However, significant sales decline and net loss due to non-recurring charges indicated challenges that need to be addressed.

Highlights

Record Performance in Performance Materials

Performance Materials had a record year in both sales and EBITDA, surpassing margins of 50%. Sales growth of 4% outpaced global auto production, driven by higher volume and improved price and mix.

Successful Repositioning of Performance Chemicals

Repositioning actions resulted in a 33% decline in revenue but improved margins. Realized $84 million of savings from repositioning, exceeding the initial target of $65-75 million.

Improved Cash Flow and Debt Reduction

Generated over $50 million of free cash flow and reduced debt by $66 million, ending the year at 3.5 times net leverage, better than expected.

Recognition for Safety and Responsibility

Achieved top quartile in personal safety performance and named one of America's most responsible companies for the third consecutive year by Newsweek Magazine.

Lowlights

Significant Sales Decline

Full year sales of $1.4 billion were down 17% from last year's sales of almost $1.7 billion, primarily due to the exit of lower margin end markets and adverse weather conditions affecting road technology sales.

GAAP Net Loss

Ended the year with a GAAP net loss of $430 million, reflecting non-recurring charges totaling $688 million, including a goodwill impairment and restructuring charges.

Challenges in Advanced Polymer Technologies

APT experienced an 8% revenue decline due to unfavorable product mix and price concessions, resulting in EBITDA of $35.2 million and an EBITDA margin of 18.7%.

Company Guidance

During the Ingevity Corporation fourth quarter and full year 2024 earnings call, the company provided guidance for 2025, projecting sales between $1.3 and $1.4 billion and EBITDA between $400 million and $415 million. The company's 2024 performance included a GAAP net loss of $430 million due to several non-recurring charges totaling $688 million. Adjusted gross profit was $521 million, and the company generated over $50 million in free cash flow. Ingevity ended 2024 with a net leverage ratio of 3.5 times and aims to reduce this to below 2.8 times by the end of 2025. Capital expenditure for 2025 is expected to be between $50 million and $70 million. The Performance Materials segment reported record sales, with EBITDA margins expected to remain around 50% in 2025. The company also anticipates free cash flow generation between $220 million and $260 million in 2025. The guidance does not account for potential impacts from exploring strategic alternatives for the Industrial Specialties product line.

Ingevity Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Ingevity Appoints David H. Li as New CEO

Positive

Mar 10, 2025

On March 10, 2025, Ingevity Corporation announced the appointment of David H. Li as President and CEO, effective April 7, 2025. Li, with over 25 years of experience in the specialty materials industry, previously served as CEO of CMC Materials, Inc. His leadership is expected to drive strategic growth and enhance stockholder value at Ingevity. Li succeeds interim President and CEO Luis Fernandez-Moreno, who will remain on the board. This leadership transition is anticipated to strengthen Ingevity’s market position and operational performance, benefiting stakeholders by fostering long-term growth and value creation.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures

Ingevity Explores Strategic Alternatives for Growth in 2025

Positive

Jan 16, 2025

Ingevity Corporation announced on January 16, 2025, that it is exploring strategic alternatives for its Performance Chemicals Industrial Specialties product line, potentially divesting parts of its North Charleston site. This move aims to strengthen its Performance Chemicals segment and improve earnings and cash flow. The company also released preliminary financial results for 2024, expecting net sales of $1.40 billion and an adjusted EBITDA of $360 million, driven by improvements in the Performance Chemicals and Performance Materials segments. Ingevity aims for growth and value creation in 2025 despite uncertainties about the outcome of its strategic review.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.