Innospec Inc. Fundamental Analysis
Innospec Inc. (IOSP) shows weak financial fundamentals with a PE ratio of 17.52, profit margin of 6.38%, and ROE of 8.68%. The company generates $1.8B in annual revenue with weak year-over-year growth of -3.65%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 44.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze IOSP's fundamental strength across five key dimensions:
Efficiency Score
WeakIOSP struggles to generate sufficient returns from assets.
Valuation Score
ExcellentIOSP trades at attractive valuation levels.
Growth Score
WeakIOSP faces weak or negative growth trends.
Financial Health Score
ExcellentIOSP maintains a strong and stable balance sheet.
Profitability Score
WeakIOSP struggles to sustain strong margins.
Key Financial Metrics
Is IOSP Expensive or Cheap?
P/E Ratio
IOSP trades at 17.52 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, IOSP's PEG of -0.03 indicates potential undervaluation.
Price to Book
The market values Innospec Inc. at 1.49 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 13.28 times EBITDA. This signals the market has high growth expectations.
How Well Does IOSP Make Money?
Net Profit Margin
For every $100 in sales, Innospec Inc. keeps $6.38 as profit after all expenses.
Operating Margin
Core operations generate 8.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.68 in profit for every $100 of shareholder equity.
ROA
Innospec Inc. generates $6.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Innospec Inc. generates limited operating cash flow of $126.85M, signaling weaker underlying cash strength.
Free Cash Flow
Innospec Inc. produces free cash flow of $76.35M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.10 in free cash annually.
FCF Yield
IOSP converts 3.87% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.52
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.03
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.49
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.11
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.04
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.98
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How IOSP Stacks Against Its Sector Peers
| Metric | IOSP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.52 | 25.01 | Better (Cheaper) |
| ROE | 8.68% | 1002.00% | Weak |
| Net Margin | 6.38% | -107149.00% (disorted) | Weak |
| Debt/Equity | 0.04 | 0.38 | Strong (Low Leverage) |
| Current Ratio | 2.98 | 6.20 | Strong Liquidity |
| ROA | 6.28% | -5669.00% (disorted) | Weak |
IOSP outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Innospec Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
47.12%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
301.10%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
-6.42%
Industry Style: Cyclical, Commodity, Value
Declining