Investment Thesis
Ingredion faces deteriorating fundamentals with declining revenues (-2.8% YoY) and negative free cash flow of -$77M despite positive accounting earnings, indicating unsustainable cash burn. Weak returns on equity (3.2%) and assets (1.8%) reveal poor capital efficiency, while the significant disconnect between net income ($142M) and operating cash flow ($33M) raises earnings quality concerns.
Strengths
- Solid balance sheet with $914M cash and conservative 0.40x debt/equity leverage ratio
- Healthy liquidity ratios (2.76x current ratio, 1.83x quick ratio) provide operational flexibility
- Stable operating margins at 11.3% demonstrate pricing power despite revenue headwinds
Risks
- Negative free cash flow of -$77M indicates company is burning cash despite accounting profitability
- Declining revenues (-2.8% YoY) and net income (-1.0% YoY) suggest structural business deterioration
- Extremely weak returns on equity (3.2%) and assets (1.8%) indicate poor capital allocation and value creation
Key Metrics to Watch
- Free cash flow reversal and path to positive cash generation
- Revenue stabilization and operating cash flow improvement relative to earnings
- Return on invested capital trends and capital expenditure efficiency
Financial Metrics
Revenue
1.8B
Net Income
142.0M
EPS (Diluted)
$2.22
Free Cash Flow
-77.0M
Total Assets
7.9B
Cash
914.0M
Profitability Ratios
Gross Margin
22.4%
Operating Margin
11.3%
Net Margin
7.9%
ROE
3.2%
ROA
1.8%
FCF Margin
-4.3%
Balance Sheet & Liquidity
Current Ratio
2.76x
Quick Ratio
1.83x
Debt/Equity
0.40x
Debt/Assets
43.9%
Interest Coverage
N/A
Long-term Debt
1.7B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T08:25:15.202581 |
Data as of: 2026-03-31 |
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