A month has gone by since the last earnings report for Ingevity (NGVT Quick QuoteNGVT - Free Report) . Shares have lost about 2.7% 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 catalysts.

Ingevity’s Q2 Earnings Meet, Revenues Miss Estimates

Ingevity recorded profits of $35.5 million or 97 cents per share in second-quarter 2023, down from a profit of $59.8 million or $1.54 per share in the year-ago quarter.

Excluding one-time items, adjusted earnings in the quarter were $1.41 per share, down from $1.73 a year ago. The figure was in line with the Zacks Consensus Estimate.

The company’s revenues rose 14.7% year over year to $481.8 million in the quarter, missing the Zacks Consensus Estimate of $483.5 million. The top line was driven by higher prices across segments, and increased volumes in the Performance Materials segment and the pavement technologies business line in the Performance Chemicals unit. These were modestly offset by lower volumes in the Performance Chemicals’ industrial specialties business line and the Advanced Polymer Technologies unit.

Segmental Review

The Performance Chemicals division generated revenues of $284 million in the reported quarter, rising around 17% year over year. The reported figure was higher than our estimate of $251 million.

Revenues in the Performance Materials unit rose around 18% year over year to $144.6 million. The figure was lower than our estimate of $160.3 million.

Sales in the Advanced Polymer Technologies segment were flat at $53.2 million. Our estimate for the same was $70.4 million.

Financials

Ingevity ended the quarter with cash and cash equivalents of $68 million, down around 48% year over year. The long-term debt was $1,525.5 million, up roughly 30% year over year.

The operating cash flow was $48.4 million in the reported quarter, down around 47% year over year.

Outlook

The company adjusted its sales guidance for 2023 to $1.6-$1.7 billion and adjusted EBITDA outlook to $390-$420 million.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -30.71% due to these changes.

VGM Scores

At this time, 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 A on the value side, putting it in the top 20% 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 these revisions indicates a downward shift. It's no surprise Ingevity has a Zacks Rank #5 (Strong Sell). We expect a below average 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, Linde (LIN Quick QuoteLIN - Free Report) , has gained 1.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Linde reported revenues of $8.2 billion in the last reported quarter, representing a year-over-year change of -3%. EPS of $3.57 for the same period compares with $3.10 a year ago.

For the current quarter, Linde is expected to post earnings of $3.58 per share, indicating a change of +15.5% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Linde. Also, the stock has a VGM Score of D.