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Ingevity (NGVT)
NYSE:NGVT
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Ingevity
(NYSE:NGVT)
Rating:54Neutral
Price Target:
$41.00
▲( 0.27% Upside)
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 Strength64
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
$45.00Price Target Upside10.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Ingevity Business Overview & Revenue Model
Company DescriptionIngevity Corporation is a leading specialty chemicals and performance materials company that operates primarily in the sectors of chemicals and materials. The company develops, manufactures, and sells a range of high-performance carbon materials and specialty chemicals that are used in a variety of applications, including automotive, industrial, and consumer products. Ingevity's core products include activated carbon for automotive applications, performance chemicals for industrial uses, and pavement technologies for infrastructure projects.
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 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
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.45
Neutral
Balance Sheet
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.50
Neutral
Cash Flow
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.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| 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
Neutral
40.89
Price Trends
37.70
Positive
41.10
Negative
40.58
Positive
Market Momentum
1.63
Negative
58.38
Neutral
25.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGVT, the sentiment is Neutral. The current price of 40.89 is above the 20-day moving average (MA) of 39.26, above the 50-day MA of 37.70, and above the 200-day MA of 40.58, indicating a bullish trend. The MACD of 1.63 indicates Negative momentum. The RSI at 58.38 is Neutral, neither overbought nor oversold. The STOCH value of 25.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
1.
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
2.
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
3.
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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.73B | 14.97 | 11.76% | ― | 70.16% | ― | |
68 Neutral | $1.23B | 22.20 | 4.65% | 2.79% | -0.16% | 47.70% | |
66 Neutral | $2.14B | 80.83 | 2.21% | 1.81% | -7.91% | -81.73% | |
65 Neutral | $1.84B | 11.37 | -1.45% | 0.72% | -3.82% | -126.04% | |
54 Neutral | $1.49B | ― | -88.14% | ― | -17.68% | -214.32% | |
50 Neutral | $2.00B | -1.13 | -21.16% | 3.71% | 2.15% | -30.95% | |
49 Neutral | $1.54B | 50.05 | 4.66% | 9.71% | -0.68% | ― |
* Basic Materials Sector Average
Performance Comparison
NGVT
Ingevity
40.89
-6.97
-14.56%
IOSP
Innospec
85.58
-40.82
-32.29%
MTX
Minerals Technologies
58.14
-25.77
-30.71%
SCL
Stepan Company
54.43
-29.47
-35.13%
CC
Chemours Company
10.30
-15.02
-59.32%
PRM
Perimeter Solutions
11.73
4.22
56.19%
Ingevity Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: 15.12%|
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 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.