Is Ingevity Corp. overvalued or undervalued?

As of 21 February 2024, Ingevity Corp. has moved from an attractive to a risky valuation grade. The company appears to be undervalued based on its current metrics, with a P/E ratio of 7, significantly lower than the industry average, and an EV to EBITDA ratio of 7.91. The PEG ratio stands at an impressive 0.06, indicating potential growth at a low price relative to earnings growth.
In comparison to its peers, Ingevity Corp. has a P/E ratio of 7.26, while Avient Corp. is very expensive at 115.57, and Innospec, Inc. is also costly with a P/E of 13.95. The company's ROE is exceptionally high at 97.71%, suggesting strong profitability despite its current valuation challenges. Notably, Ingevity's stock has underperformed against the S&P 500 over the past year, which may reinforce the perception of it being undervalued given its strong financial ratios.