Ingevity (NGVT) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Ingevity (NGVT) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Stock Price Target: $77.42
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Ingevity in comparison to the Specialty Chemical industry and the S&P 500.
Ingevity is a Small Cap company with a Market Cap of $2.4B.
How are investors using Ingevity earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Ingevity is 12.77%, in comparison to 5.12% for the S&P 500 and 2.93% for the 10-year treasury bond. The median earnings yield for the Chemical industry is 6.49%.
What does Ingevity Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Ingevity is currently trading at a P/E of 18.49. The P/E for the Chemical industry is 12.68 and the P/E for the S&P 500 is 19.52.
What is the current Price-to-Sales Ratio (P/S) for Ingevity?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Ingevity is currently trading at a P/S of 1.74. The P/S for the Chemical industry is 2.88 and the P/S for the S&P 500 is 2.39.
How does Ingevity Price-to-BookRatio (P/B) compare to the Chemical industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Ingevity P/B ratio is 3.53. The P/B for the Chemical industry is 3.49 and the P/B for the S&P 500 is 3.83.
How attractive is Ingevity Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Ingevity ROIC is currently 7.19% in comparison to 10.08% for the Chemical industry and 9.10% for the S&P 500.
How has NGVT stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Ingevity has traded between the range of $56.31 and $88.58.
The current Analyst Price Target for Ingevity is $77.42.
What is Ingevity YOY Performance in comparison to its industry and the total market?
The YOY performance for Ingevity is -23.56%. The Chemical industry has a YOY performance of -11.90% in comparison to the YOY S&P 500 performance of -11.58%.
Recent Financial Results (Q1, 2022)
- Record sales of $382.8M, up 19.5%
- Net income of $60.8M and diluted earnings per share (EPS) of $1.55; adjusted earnings of $63.5M and diluted adjusted EPS of $1.62
- Adjusted EBITDA of $119M, up 12.9% and adjusted EBITDA margin of 31.1%
- Operating cash flow of $24.3M and free cash flow of negative $3.3M, reflecting working capital increases driven by the strong sales
- Company adjusted full year 2022 guidance increasing the top ends of the ranges to sales between $1.525B and $1.65B and adjusted EBITDA between $430M and $470M
Stock Price Target: $77.42
Ingevity 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.
Ingevity Corporation was founded in 1964 and is headquartered in North Charleston, South Carolina.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.