A month has gone by since the last earnings report for Ingevity (NGVT Quick QuoteNGVT - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ingevity due for a breakout? 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 drivers.

Ingevity's Earnings and Sales Top Estimates in Q2

Ingevity logged profits of $44.3 million or $1.10 per share in second-quarter 2021, up around 119.3% from $20.2 million or 49 cents a year ago.

Excluding one-time items, adjusted earnings for the quarter were $1.55 per share, increasing from 63 cents a year ago and also beating the Zacks Consensus Estimate of $1.21.

The company’s top line rose 32.4% year over year to $358.4 million in the quarter, beating the Zacks Consensus Estimate of $331.6 million. In the second quarter, Ingevity benefited from higher volumes and price increases across its business segments. It saw a strong rise in automotive-based activated carbon sales and significant growth in engineered polymers across several applications.

Adjusted EBITDA went up 75.1% year over year to $117.7 million in the quarter.

Segment Review

The Performance Chemicals division generated revenues of $232.4 million in the reported quarter, rising 24.8% year over year. The company witnessed robust sales growth in both engineered polymers and industrial specialties. Improved demand for the products boosted engineered polymers, while strengthening lubricant, adhesive and dispersant markets together with price increases gave the growth momentum to industrial specialties. Pavement technologies sales also increased in the quarter.

Revenues from the Performance Materials unit climbed 49.3% year over year to $126 million. Strong growth for the company’s activated carbon products used in gasoline vapor emission control systems contributed to the upside, even though there was a negative impact on global auto production due to continuing shortage in microchips.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $233.3 million, up around 31.4% year over year. Long-term debt was $1,258.7 million, down around 3.8% year over year.

Outlook

The company raised its outlook for 2021 sales to $1.32-$1.36 billion from $1.275-$1.325 billion expected earlier. It also now anticipates adjusted EBITDA of $425-$440 million, up from the prior view of $410-$430 million.

It is hopeful of a strong performance in the second half of the year despite challenges from transportation and logistics, disruptions in inputs of the auto sector and raw-material cost inflation.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Ingevity has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 these revisions 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.