## Ingevity (NGVT) Earnings Preview: What to Watch for on October 29th
Investors will be closely watching Ingevity Corp. (NGVT) as it prepares to release its quarterly earnings on Tuesday, October 29th. The company’s performance in the coming months will hinge on its ability to deliver strong earnings and provide positive guidance, which could significantly impact the stock’s trajectory. Here’s a breakdown of key factors to keep in mind ahead of the announcement.
Analyst Expectations and Key Metrics
Analysts anticipate Ingevity to report earnings per share (EPS) of $0.90. While exceeding this estimate would be a positive sign for investors, the company’s guidance for the next quarter will be equally important. Often, it’s the forecast, rather than a single quarter’s earnings beat or miss, that truly influences stock price movements.
Historical Performance: A Mixed Bag
Looking back at Ingevity’s past performance, we see a trend of mixed results. In the previous earnings release, the company missed EPS by $0.04, causing a 7.08% drop in the share price the following trading session. Here’s a glance at Ingevity’s historical earnings performance and the subsequent price changes:
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Q2 2024:
EPS Estimate: 1.05, EPS Actual: 1.01, Price Change: -7.00%*
Q1 2024:
EPS Estimate: 0.32, EPS Actual: 0.52, Price Change: 6.0%*
Q4 2023:
EPS Estimate: -0.19, EPS Actual: 0.21, Price Change: 5.0%*
Q3 2023:
EPS Estimate: 1.21, EPS Actual: 1.21, Price Change: 8.0%Stock Performance and Sentiment
As of October 25th, Ingevity shares were trading at $33.65. Over the past 52 weeks, the stock has declined by 12.95%. This downward trend suggests that long-term shareholders might be cautiously bearish going into this earnings release.
Analyst Insights
Understanding the market sentiment and expectations within the industry is crucial for investors. Four analysts have rated Ingevity, with the consensus rating being Neutral. The average one-year price target stands at $43.0, implying a potential 27.79% upside. This suggests that analysts are generally optimistic about Ingevity’s long-term prospects, but are waiting for more concrete signs of improvement before issuing more bullish ratings.
Peer Analysis: A Competitive Landscape
To gain further context, let’s examine the analyst ratings and average one-year price targets of Aspen Aerogels, Valhi, and Ecovyst, three key competitors in Ingevity’s industry. This analysis provides insights into their relative performance expectations and market positioning.
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Aspen Aerogels:
Consensus: Buy, Average 1-year price target: $30.14 (10.43% downside)*
Valhi:
Consensus: Underperform, Average 1-year price target: $20.0 (40.56% downside)*
Ecovyst:
Consensus: Buy, Average 1-year price target: $11.0 (67.31% downside)Key Takeaways from Peer Analysis
When comparing key metrics such as revenue growth, gross profit, and return on equity, Ingevity’s performance stands out in both positive and negative ways.
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Revenue Growth:
Ingevity lags behind its peers with a decline of 18.93%, while Aspen Aerogels boasts a significant growth of 144.55%. This highlights the company’s struggle to maintain revenue momentum.*
Gross Profit:
Ingevity leads the pack with $123.20M in gross profit, outperforming its competitors. This demonstrates the company’s ability to generate solid margins on its operations.*
Return on Equity:
Ingevity’s return on equity stands at -66.52%, the lowest among its peers. This indicates challenges in effectively leveraging shareholder investment.Ingevity: A Financial Overview
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Market Capitalization:
Ingevity’s market capitalization is below industry averages, indicating a relatively smaller size compared to its competitors. This positioning could be attributed to factors such as perceived growth potential or operational scale.*
Revenue Trend:
Ingevity’s revenue growth has been declining over the past three months, dropping by approximately 18.93%. This trend raises concerns about the company’s ability to generate consistent top-line growth.*
Net Margin:
Ingevity’s net margin lags behind industry averages, pointing to challenges in maintaining strong profitability. A net margin of -72.63% suggests potential difficulties in managing costs effectively.*
Return on Equity (ROE):
Ingevity’s ROE is below industry averages, indicating challenges in maximizing returns on equity capital. An ROE of -66.52% highlights the company’s struggle to generate optimal financial performance.*
Return on Assets (ROA):
Ingevity’s ROA falls below industry averages, indicating challenges in efficiently utilizing assets. An ROA of -11.72% suggests that the company needs to improve its asset utilization strategies.*
Debt Management:
Ingevity’s debt-to-equity ratio is significantly higher than the industry average. With a ratio of 5.49, the company relies heavily on borrowed funds, indicating a higher level of financial risk.Conclusion
The upcoming earnings release from Ingevity will be a critical event for the company and its investors. While the company has demonstrated strengths in areas like gross profit, its challenges in revenue growth, return on equity, and debt management warrant attention. Investors should carefully analyze the company’s financial performance, guidance for the next quarter, and its ability to address these challenges in order to make informed investment decisions.
