Ingevity (NGVT) AI Stock Analysis

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Ingevity

(NYSE:NGVT)

Rating:54Neutral

Price Target:

$43.00

▲(3.81%Upside)

The overall stock score is driven by financial challenges and a weak valuation, despite positive strategic changes and technical indicators. The mixed earnings call results and high leverage further weigh down the score, though the new CEO appointment offers potential for future improvements.

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 Adjustment

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

Trade Risks

Management widened the full year guidance range due to trade war and incremental risks tied to tariffs on auto production.

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

Market Cap

$1.55B

Dividend YieldN/A

Average Volume (3M)246.65K

Price to Earnings (P/E)―

Beta (1Y)1.58

Revenue Growth-17.68%

EPS Growth-214.32%

CountryUS

Employees1,600

SectorBasic Materials

Sector Strength68

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.99

Shares Outstanding36,464,880

10 Day Avg. Volume194,311

30 Day Avg. Volume246,651

Financial Highlights & Ratios

PEG Ratio0.15

Price to Book (P/B)3.85

Price to Sales (P/S)0.00

P/FCF Ratio15.76

Enterprise Value/Market Cap2.65

Enterprise Value/Revenue0.71

Enterprise Value/Gross Profit8.76

Enterprise Value/Ebitda-3.04

Forecast

1Y Price Target

$47.00

Price Target Upside13.47% 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: 16.61%|

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 and high leverage. Despite positive free cash flow, the company shows negative net income and a high debt-to-equity ratio, indicating financial strain.

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
468.40M	454.70M	471.90M	541.00M	480.60M	465.50M
	EBIT
276.80M	259.90M	256.40M	341.00M	307.20M	297.60M
	EBITDA
-240.20M	-329.50M	399.50M	456.30M	417.30M	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
71.50M	68.00M	95.90M	76.70M	275.40M	257.70M
	Total Assets
2.06B	2.02B	2.62B	2.74B	2.47B	2.33B
	Total Debt
1.44B	1.45B	1.53B	1.53B	1.25B	1.34B
	Net Debt
1.37B	1.39B	1.44B	1.45B	974.60M	1.09B
	Total Liabilities
1.82B	1.83B	1.99B	2.04B	1.80B	1.69B
	Stockholders Equity
234.60M	195.20M	631.40M	698.30M	673.80M	642.10M
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

Neutral

Last Price41.42

Price Trends

50DMA

38.17

Positive

100DMA

41.17

Positive

200DMA

41.05

Positive

Market Momentum

MACD

0.83

Positive

RSI

49.73

Neutral

STOCH

28.75

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 41.42 is below the 20-day moving average (MA) of 42.22, above the 50-day MA of 38.17, and above the 200-day MA of 41.05, indicating a neutral trend. The MACD of 0.83 indicates Positive momentum. The RSI at 49.73 is Neutral, neither overbought nor oversold. The STOCH value of 28.75 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 0 New Risks

Ingevity Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRM	74 Outperform	$1.96B	16.76	11.76%	―	70.16%	―
SCL	66 Neutral	$1.24B	22.41	4.65%	2.80%	-0.16%	47.70%
IOSP	63 Neutral	$2.11B	79.73	2.21%	1.99%	-7.91%	-81.73%
MTX	60 Neutral	$1.73B	11.37	-1.45%	0.80%	-3.82%	-126.04%
NGVT	54 Neutral	$1.55B	―	-88.14%	―	-17.68%	-214.32%
Sector *	51 Neutral	$2.03B	-1.27	-21.09%	4.14%	2.90%	-30.49%
CC	49 Neutral	$1.64B	53.16	4.66%	3.20%	-0.68%	―

* Basic Materials Sector Average

Performance Comparison

NGVT

Ingevity

41.42

-2.29

-5.24%

IOSP

Innospec

83.18

-36.85

-30.70%

MTX

Minerals Technologies

54.01

-29.32

-35.19%

SCL

Stepan Company

54.06

-27.64

-33.83%

Chemours Company

10.74

-11.12

-50.87%

PRM

Perimeter Solutions

13.13

5.25

66.62%

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.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.