Ingevity (NGVT) Up 0.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ingevity (NGVT). Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ingevity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ingevity's Earnings and Sales Surpass Estimates in Q4
Ingevity recorded a fourth-quarter 2023 loss of $116.8 million or $3.23 per share. This compares with a profit of $15.6 million or 41 cents per share in the year-ago quarter.
Excluding one-time items, adjusted earnings in the quarter were 21 cents per share, down from 57 cents a year ago. The figure topped the Zacks Consensus Estimate of a loss of 13 cents.
Revenues fell around 3% year over year to $371.7 million in the quarter. It beat the Zacks Consensus Estimate of $331.8 million. Increased volumes in the Performance Materials segment and the Road Technologies business line were more than offset by reduced volumes in the Advanced Polymer Technologies segment and the Industrial Specialties business line.
Segmental Review
The Performance Chemicals division generated revenues of $176.5 million in the reported quarter, down around 8% year over year. The reported figure was higher than the consensus estimate of $165 million. Higher sales in Road Technologies were more than offset by a decline in Industrial Specialties.
Revenues in the Performance Materials unit rose around 15% year over year to $152.8 million on higher volumes in China and increased pricing in automotive end markets. The figure was higher than the consensus estimate of $126 million.
Sales in the Advanced Polymer Technologies segment were down 29% to $42.4 million on weaker volumes in many of the end markets. It was above the consensus estimate of $41 million.
FY23 Results
Loss for full-year 2023 was 15 cents per share. This compares with earnings of $5.50 per share a year ago. Net sales rose around 1% year over year to $1,692.1 million.
Financials
Ingevity ended 2023 with cash and cash equivalents of $95.9 million, up around 25% year over year. Long-term debt was $1,382.8 million, down around 6% year over year.
Operating cash flow for full-year 2023 was $205.1 million, while free cash flow was $95.3 million.
Outlook
The company expects sales between $1.40 billion and $1.55 billion for 2024. Adjusted EBITDA is forecast to be between $365 million and $390 million for the year. Ingevity noted that its Performance Materials segment and the Road Technologies business line are positioned for strong growth in 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -40.91% due to these changes.
VGM Scores
Currently, Ingevity has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Ingevity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ingevity belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, Element Solutions (ESI), has gained 4.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Element Solutions reported revenues of $573.4 million in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $0.32 for the same period compares with $0.29 a year ago.
Element Solutions is expected to post earnings of $0.32 per share for the current quarter, representing a year-over-year change of +6.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -6.9%.
Element Solutions has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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