Has Ingevity’s 48.8% Rally in 2025 Outpaced Its Fundamental Recovery?

• Wondering if Ingevity at around $58.83 is still a smart buy or if the easy money has already been made? You are not alone; this stock has quietly been drawing fresh attention from value focused investors.
• After a tough few years, the share price has surged, up 12.6% over the last week, 18.8% over the past month, and 48.8% year to date, even though the 3 and 5 year returns are still down 15.5% and 19.7% respectively.
• Part of this turnaround story reflects shifting sentiment around specialty chemicals and performance materials, with investors increasingly willing to back companies that can use niche technologies and smarter portfolio management to defend margins in a choppy economic backdrop. Ingevity has also been in focus as management leans into cost discipline and strategic repositioning that could make its cash flows more resilient if macro conditions stay uneven.
• Even so, Ingevity only scores a 2/6 on our valuation checks, hinting at a mix of potential upside and pockets of over optimism. Next we will break down what different valuation methods say about that gap, before finishing with a more complete way to think about the company’s true worth.

Ingevity scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ingevity Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and discounting those dollars back to today's value. For Ingevity, this means taking expected Free Cash Flow and translating it into a present day valuation per share.

In the last twelve months, Ingevity generated about $213.5 million in Free Cash Flow. Analysts provide detailed forecasts out to 2027, with Free Cash Flow expected to reach roughly $197.4 million, and Simply Wall St then extrapolates a gradual trajectory so that by 2035 projected Free Cash Flow is around $217.5 million. While the path is not aggressively growth heavy, the model assumes cash flows remain solid and relatively stable over time.

Using a 2 Stage Free Cash Flow to Equity DCF approach, these projected cash flows translate to an intrinsic value estimate of about $88.22 per share. Compared with the current share price near $58.83, the DCF implies the stock is roughly 33.3% undervalued, based on these cash flow assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Ingevity is undervalued by 33.3%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Ingevity.

Approach 2: Ingevity Price vs Sales

For companies like Ingevity where earnings can swing with the cycle, the Price to Sales ratio is a useful way to judge valuation because it focuses on the stability of revenue rather than short term profit noise. Investors generally accept paying a higher sales multiple for businesses with stronger growth prospects and lower perceived risk. Slower growing or more volatile names usually command a discount.

Ingevity currently trades at about 1.53x sales, which is slightly above both the broader chemicals industry average of roughly 1.09x and the peer group around 1.20x. Simply Wall St also calculates a proprietary Fair Ratio of 1.16x, which reflects what investors might reasonably pay given Ingevity’s specific mix of growth outlook, profitability, industry positioning, size, and risk profile. This tailored benchmark is more informative than a simple industry or peer comparison because it adjusts for the company’s own fundamentals rather than assuming all chemical stocks deserve the same multiple.

With the market paying 1.53x versus a Fair Ratio of 1.16x, Ingevity screens as somewhat expensive on a sales basis.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ingevity Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company, tied directly to the numbers you think are realistic for its future revenue, earnings, margins, and ultimately its fair value.

On Simply Wall St, Narratives live in the Community page and are an easy, accessible tool used by millions of investors to link a company’s real world story, like portfolio repositioning or EV battery exposure, to a concrete financial forecast and then to a fair value per share.

Once you have a Narrative, the platform continuously compares its Fair Value to the live market price so you can quickly see how your story about Ingevity compares to the current market view. It also updates automatically when fresh information such as earnings, guidance changes, or news hits the tape.

For example, one Ingevity Narrative may lean bullish and see fair value closer to 70 dollars, based on the belief that battery materials and margin expansion will stick. A more cautious Narrative may sit near 52 dollars, assuming tougher competition and weaker growth. This gives you a clear, number backed range of perspectives to compare against the current price.

Do you think there's more to the story for Ingevity? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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