Ingevity (NGVT) AI Stock Analysis

Compare

219 Followers

Top Page

Ingevity

(NYSE:NGVT)

Rating:54Neutral

Price Target:

$41.00

▼(-6.29%Downside)

Ingevity's overall stock score is driven by significant financial challenges, including high leverage and declining revenues, partially offset by positive free cash flow. Technical indicators suggest some momentum, but valuation concerns persist. The recent CEO appointment is a positive development that could support strategic growth.

Positive Factors

Earnings Growth

NGVT has reached a positive inflection point in its turnaround with earnings growth and a significant jump in free cash flow.

Strategic Review

The strategic review of NGVT's PC business could unlock value and drive upside, presenting a positive risk/reward scenario.

Negative Factors

Guidance Revision

NGVT lowered its full-year guidance on lower global auto production expectations.

Tariffs Impact

There are still risks tied to potential auto-related tariffs that could impact NGVT's stock.

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

Market Cap

$1.49B

Dividend YieldN/A

Average Volume (3M)277.86K

Price to Earnings (P/E)―

Beta (1Y)1.59

Revenue Growth-17.68%

EPS Growth-214.32%

CountryUS

Employees1,600

SectorBasic Materials

Sector Strength65

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.99

Shares Outstanding36,464,880

10 Day Avg. Volume251,957

30 Day Avg. Volume277,861

Financial Highlights & Ratios

PEG Ratio-0.23

Price to Book (P/B)6.28

Price to Sales (P/S)0.00

P/FCF Ratio15.52

Enterprise Value/Market Cap1.88

Enterprise Value/Revenue0.48

Enterprise Value/Gross Profit6.08

Enterprise Value/Ebitda-2.07

Forecast

1Y Price Target

$45.00

Price Target Upside2.86% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Ingevity Business Overview & Revenue Model

Company DescriptionIngevity Corporation manufactures and sells specialty chemicals and activated carbon materials in North America, the Asia Pacific, Europe, the Middle East, Africa, and South America. The company operates through two segments, Performance Materials and Performance Chemicals. The Performance Materials segment engineers, manufactures, and sells hardwood-based and chemically activated carbon products primarily for use in gasoline vapor emission control systems in cars, motorcycles, trucks, and boats. This segment also produces other activated carbon products for use in various applications, including food, water, beverage, and chemical purification. The Performance Chemicals segment comprises of pavement technologies, industrial specialties, and engineered polymers. It manufactures products derived from crude tall oil and lignin extracted from the kraft pulping process, as well as caprolactone monomers and derivatives derived from cyclohexanone and hydrogen peroxide. This segment's products are used in various applications comprising warm mix paving, pavement preservation, pavement reconstruction and recycling, oil well service additives, oil production, and downstream applications; and adhesives, agrochemical dispersants, lubricants, printing inks, industrial intermediates and oilfield, coatings, resins, elastomers, bioplastics, and medical devices. Ingevity Corporation was founded in 1964 and is headquartered in North Charleston, South Carolina.

How the Company Makes MoneyIngevity makes money by producing and selling specialty chemicals and performance materials to a diverse set of industries. Its revenue model is primarily based on the sale of products such as activated carbon, which is used in automotive emissions control systems, and specialty chemicals used in oilfield applications, adhesives, and lubricants. The company benefits from long-term contracts and partnerships with key customers in the automotive and industrial sectors, which provide stable and recurring revenue streams. Additionally, Ingevity's innovative product offerings and commitment to sustainability contribute to its competitive positioning and ability to capture market share in the chemicals and materials industry.

Ingevity Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 23.17%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call displayed mixed results, with strong improvements in profitability and cash flow offset by significant sales declines and challenges in specific segments. Adjustments in guidance due to auto production forecasts and competitive pressures in certain markets present challenges. However, the company exhibits strong operational execution and financial discipline.

Q1-2025 Updates

Positive Updates

Fourth Consecutive Quarter of Year-over-Year Margin Expansion

Ingevity demonstrated meaningful progress with its fourth consecutive quarter of year-over-year margin expansion, reflecting increased profitability and strong free cash flow generation.

Adjusted EBITDA and Free Cash Flow Improvement

Adjusted EBITDA improved by $17 million, with margins increasing from 21.9% to 32.1%. Free cash flow improved by $44 million from Q1 last year, primarily due to repositioning benefits.

Performance Materials Sales Growth

Performance Materials had higher sales due to favorable regional and product mix as well as annual price increases. The EBITDA margins remained near 54% for the quarter.

Strong Cash Flow and Debt Reduction

The company's successful execution of repositioning and improved working capital is driving strong free cash flow, continuing to reduce leverage with net leverage ending the quarter at 3.3x.

Negative Updates

Sales Decline in First Quarter

First quarter sales of $284 million were down 17% versus Q1 last year, primarily due to repositioning actions in performance chemicals and weak industrial demand.

Lower Sales in Performance Chemicals

Performance Chemicals sales were lower by 35% primarily as a result of repositioning actions. Industrial specialties had revenue in line with expectations but was significantly down compared to the previous year.

Challenges in Advanced Polymer Technologies

APT experienced lower overall sales in the quarter with volumes mixed depending on the region. Increased competition in Asia put downward pressure on prices.

Adjustment of Guidance Due to Auto Production Forecast

Guidance was adjusted to reflect an expected 10% reduction in North American auto production, which may lower segment EBITDA by $15 million to $20 million.

Company Guidance

In the Ingevity First Quarter 2025 Earnings Call, the company provided updated guidance reflecting changes in the macroeconomic environment. The guidance was adjusted to account for a potential 10% year-over-year decline in North American auto production, which could result in a $15 million to $20 million reduction in segment EBITDA. Ingevity expects to maintain strong profitability despite these headwinds, emphasizing the successful execution of repositioning actions, which have led to margin improvements. Adjusted EBITDA margins improved from 21.9% to 32.1% year-over-year, while free cash flow increased by $44 million compared to the previous year. The company reaffirmed its commitment to reducing leverage to less than 2.8x by year-end, supported by strong free cash flow generation. Overall, Ingevity remains focused on executing its strategy to optimize the portfolio, improve leverage, and drive shareholder value.

Ingevity Financial Statement Overview

Summary

Ingevity faces significant financial challenges, with declining revenues, high leverage, and ongoing profitability issues. Despite a positive free cash flow, high debt levels and negative net income raise concerns about long-term financial stability.

Income Statement

Neutral

Ingevity's income statement reveals significant challenges, with a decline in total revenue from $1.69 billion in 2023 to $1.35 billion TTM and a net loss of $353.8 million TTM. The gross profit margin stands at 34.06% TTM, indicating some cost efficiency. However, the net profit margin is deeply negative, reflecting ongoing profitability issues. Despite a decent EBIT margin of 21.01% TTM, the company's revenue growth has been inconsistent, showing a negative trend in the latest period.

Balance Sheet

Neutral

The balance sheet shows a high debt-to-equity ratio of 5.94 TTM, indicating significant leverage. The equity ratio is low at 11.41% TTM, suggesting potential balance sheet vulnerabilities. Return on equity is negative due to losses, highlighting profitability challenges. Overall, the company's financial structure is strained, with high leverage and low equity levels.

Cash Flow

Neutral

Ingevity's cash flow statement offers a mixed picture. The operating cash flow to net income ratio is negative due to substantial net losses, but free cash flow is positive at $95.1 million TTM, indicating some cash generation ability. Free cash flow growth has been positive compared to the annual period of 2024, but the company's cash flow performance remains inconsistent.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.35B	1.41B	1.69B	1.67B	1.39B	1.22B
	Gross Profit
460.10M	454.70M	471.90M	570.10M	512.80M	465.50M
	EBIT
283.70M	259.90M	288.20M	342.70M	227.30M	297.60M
	EBITDA
-240.20M	-329.50M	224.60M	456.30M	337.20M	397.80M
	Net Income Common Stockholders
-353.80M	-430.30M	-5.40M	211.60M	118.10M	181.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
105.10M	68.00M	95.90M	76.70M	275.40M	257.70M
	Total Assets
2.57B	2.02B	2.62B	2.74B	2.47B	2.33B
	Total Debt
1.56B	1.45B	1.53B	1.49B	1.25B	1.27B
	Net Debt
1.45B	1.39B	1.44B	1.41B	974.60M	1.01B
	Total Liabilities
2.00B	1.83B	1.99B	2.04B	1.80B	1.69B
	Stockholders Equity
568.20M	195.20M	631.40M	698.30M	673.80M	647.30M
Cash Flow		Free Cash Flow
95.10M	51.00M	95.30M	170.60M	189.20M	246.50M
	Operating Cash Flow
166.10M	128.60M	205.10M	313.10M	293.00M	352.40M
	Investing Cash Flow
-74.70M	-79.50M	-77.30M	-553.90M	-140.60M	-110.60M
	Financing Cash Flow
-104.60M	-70.20M	-99.90M	48.10M	-133.10M	-50.20M

Ingevity Technical Analysis

Technical Analysis Sentiment

Positive

Last Price43.75

Price Trends

50DMA

37.69

Positive

100DMA

41.14

Positive

200DMA

40.62

Positive

Market Momentum

MACD

1.73

Negative

RSI

67.92

Neutral

STOCH

48.57

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGVT, the sentiment is Positive. The current price of 43.75 is above the 20-day moving average (MA) of 39.82, above the 50-day MA of 37.69, and above the 200-day MA of 40.62, indicating a bullish trend. The MACD of 1.73 indicates Negative momentum. The RSI at 67.92 is Neutral, neither overbought nor oversold. The STOCH value of 48.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 3 New Risks

The repositioning of our Performance Chemicals business has reduced our net sales and may otherwise adversely affect our financial condition and results of operations during this transition period. Q4, 2024

Our review of strategic alternatives for the industrial specialties product line and North Charleston, South Carolina crude tall oil ("CTO") refinery may not result in a transaction and any transaction entered into may not yield the expected results or benefits. Q4, 2024

Adverse weather conditions and other environmental impacts (such as climate change and extreme weather) may impact our operations and the demand for some of our products, which could negatively affect our financial condition and results of operations. Q4, 2024

Ingevity Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRM	72 Outperform	$1.73B	14.97	11.76%	―	70.16%	―
SCL	68 Neutral	$1.23B	22.20	4.65%	2.79%	-0.16%	47.70%
IOSP	66 Neutral	$2.19B	82.98	2.21%	1.81%	-7.91%	-81.73%
MTX	65 Neutral	$1.84B	11.37	-1.45%	0.72%	-3.82%	-126.04%
NGVT	54 Neutral	$1.49B	―	-88.14%	―	-17.68%	-214.32%
Sector *	50 Neutral	$2.00B	-1.13	-21.16%	3.71%	2.15%	-30.95%
CC	49 Neutral	$1.59B	51.60	4.66%	9.71%	-0.68%	―

* Basic Materials Sector Average

Performance Comparison

NGVT

Ingevity

43.75

-4.11

-8.59%

IOSP

Innospec

87.85

-38.55

-30.50%

MTX

Minerals Technologies

59.95

-23.96

-28.55%

SCL

Stepan Company

56.46

-27.44

-32.71%

Chemours Company

10.62

-14.70

-58.06%

PRM

Perimeter Solutions

11.95

4.44

59.12%

Ingevity Corporate Events

Executive/Board ChangesShareholder Meetings

Ingevity Expands Board, Elects New Chair

Neutral

May 1, 2025

On April 30, 2025, Ingevity Corporation’s Board of Directors expanded from nine to eleven members, electing Mr. David H. Li and Mr. F. David Segal to fill the new positions. Mr. Bruce D. Hoechner was elected as Chair of the Board for a two-year term. The company’s 2025 Annual Meeting of Stockholders also took place, where stockholders voted on various proposals, including the election of nine director nominees and the approval of the 2025 Omnibus Incentive Plan.

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.

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.