IPG Photonics Corporation (IPGP)
NASDAQ:IPGP
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IPG Photonics
(NASDAQ:IPGP)
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Rating:60Neutral
Price Target:
$120.00
▲(5.32% Upside)
Action:ReiteratedDate:03/17/26
The score is driven primarily by a strong, low-risk balance sheet but tempered by weak 2025 cash flow and only partial profitability recovery. Earnings-call signals (book-to-bill >1 and improving mix) support the outlook, while the very high P/E and recent technical softening limit upside confidence, with patent litigation adding a smaller but notable risk.
Positive Factors
Strong, debt-free balance sheet
IPG’s essentially debt‑free capital structure and large liquid position provide durable financial flexibility to fund R&D, the announced CapEx program, buybacks, and working capital through industrial cycles. This reduces solvency risk and supports strategic investments without reliance on external financing during 2–6 months and beyond.
Negative Factors
Weakened cash conversion / negative FCF
2025 saw a material drop in operating cash flow and slightly negative free cash flow despite returning to net income. Persistently weaker cash conversion reduces internal funding capacity for CapEx and growth initiatives, increases reliance on cash reserves, and raises execution risk if revenue or margin trends falter.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong, debt-free balance sheet
IPG’s essentially debt‑free capital structure and large liquid position provide durable financial flexibility to fund R&D, the announced CapEx program, buybacks, and working capital through industrial cycles. This reduces solvency risk and supports strategic investments without reliance on external financing during 2–6 months and beyond.
Read all positive factors
IPG Photonics (IPGP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.81B
Dividend YieldN/A
Average Volume (3M)479.75K
Price to Earnings (P/E)98.1
Beta (1Y)1.23
Revenue Growth-7.49%
EPS GrowthN/A
CountryUS
Employees4,740
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.31
Shares Outstanding42,191,353
10 Day Avg. Volume376,829
30 Day Avg. Volume479,755
Financial Highlights & Ratios
PEG Ratio-0.83
Price to Book (P/B)1.43
Price to Sales (P/S)3.04
P/FCF Ratio-883.02
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue4.39
Enterprise Value/Gross Profit11.54
Enterprise Value/Ebitda43.81
Forecast
1Y Price Target
$169.67Price Target Upside48.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)1.61
Revenue Forecast (FY)$1.10B
IPG Photonics Business Overview & Revenue Model
Company Description
IPG Photonics Corporation develops, manufactures, and sells various high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide. The company's laser products include hy...
How the Company Makes Money
IPG Photonics makes money primarily by selling fiber lasers and laser-based systems used in industrial manufacturing. Its core revenue stream is product sales of fiber lasers (including high-power lasers used for metal cutting and welding and othe...
IPG Photonics Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales by region, showing exposure to key markets like China, North America, and Europe. Geographic mix matters for growth prospects and risks: heavy reliance on a single region can amplify impacts from local downturns, trade measures, or currency swings, while diversification points to broader market reach and resilience.
Breaks down sales by region, showing exposure to key markets like China, North America, and Europe. Geographic mix matters for growth prospects and risks: heavy reliance on a single region can amplify impacts from local downturns, trade measures, or currency swings, while diversification points to broader market reach and resilience.
Data provided by:
The Fly
The FlyIPG Photonics Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive tone: management reported a strong Q4 beat, the company's first full-year revenue growth since 2021, growing contribution from higher-margin and emerging markets (medical, micromachining, advanced applications), solid cash and no debt, and product/technology milestones (awards, BUV demo, Crossbow launch). Headwinds were acknowledged—tariff-related margin pressure, under-absorption from inventory decisions, higher product costs, and some timing-related order shipping into future quarters—along with increased 2026 CapEx. Overall, the positive operational momentum, diversified growth drivers, robust balance sheet, and book-to-bill >1 outweigh the margin and timing challenges, but management remains cautiously optimistic.Positive Updates
Strong Q4 Revenue Beat
Revenue of $274 million in Q4 2025, +17% year-over-year and +9% sequentially; foreign currency added ~$6 million (≈2%) in the quarter.
Negative Updates
Gross Margin Pressure from Tariffs and Cost Absorption
GAAP gross margin was 36.1% and adjusted gross margin 37.6% in Q4; tariffs reduced gross margin by ~200 basis points year-over-year (50 bps worse than expected) and under-absorption of fixed costs (planned inventory management) further depressed margins versus revenue level.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Revenue Beat
Revenue of $274 million in Q4 2025, +17% year-over-year and +9% sequentially; foreign currency added ~$6 million (≈2%) in the quarter.
Read all positive updates
Company Guidance
The company guided for Q1 2026 revenue of $235 million to $265 million with adjusted gross margin of 37%–39% (including an estimated tariff headwind of ~150 basis points), operating expenses of $90 million–$92 million, adjusted EBITDA of $25 million–$40 million, and adjusted EPS of $0.10–$0.40 on ~42.5 million diluted shares; management noted book‑to‑bill was firmly above one (though some medical/systems bookings will ship after Q1), expects tariffs to persist at a moderated level, anticipates operating expenses to increase modestly through the year to accelerate growth initiatives, and reaffirmed 2026 CapEx of $90 million–$100 million (with underlying CapEx ≈5% of revenue) while highlighting margin upside as revenue growth improves fixed‑cost absorption toward the company’s >40% gross‑margin target.IPG Photonics Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
88
Very Positive
Cash Flow
46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.00B | 977.13M | 1.29B | 1.43B | 1.46B |
| Gross Profit | 381.46M | 338.15M | 541.70M | 555.41M | 696.40M |
| EBITDA | 111.95M | 75.92M | 301.19M | 321.97M | 449.09M |
| Net Income | 31.10M | -181.53M | 218.88M | 109.91M | 278.42M |
Balance Sheet | |||||
| Total Assets | 2.42B | 2.29B | 2.70B | 2.74B | 3.17B |
| Cash, Cash Equivalents and Short-Term Investments | 839.33M | 930.19M | 1.18B | 1.18B | 1.51B |
| Total Debt | 0.00 | 17.96M | 18.26M | 38.05M | 58.13M |
| Total Liabilities | 296.15M | 264.79M | 283.51M | 357.92M | 423.32M |
| Stockholders Equity | 2.13B | 2.02B | 2.42B | 2.39B | 2.75B |
Cash Flow | |||||
| Free Cash Flow | -3.45M | 149.37M | 185.50M | 102.51M | 266.59M |
| Operating Cash Flow | 75.34M | 247.90M | 295.99M | 212.65M | 389.70M |
| Investing Cash Flow | -265.23M | 208.73M | -237.55M | 296.95M | -416.28M |
| Financing Cash Flow | -54.19M | -339.62M | -236.38M | -514.55M | -125.07M |
IPG Photonics Technical Analysis
Positive
113.94
Price Trends
116.75
Negative
97.66
Positive
88.42
Positive
Market Momentum
-1.02
Positive
46.81
Neutral
33.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IPGP, the sentiment is Positive. The current price of 113.94 is below the 20-day moving average (MA) of 117.15, below the 50-day MA of 116.75, and above the 200-day MA of 88.42, indicating a neutral trend. The MACD of -1.02 indicates Positive momentum. The RSI at 46.81 is Neutral, neither overbought nor oversold. The STOCH value of 33.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IPGP.
IPG Photonics Risk Analysis
IPG Photonics disclosed 36 risk factors in its most recent earnings report. IPG Photonics reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
IPG Photonics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.41B | 12.15 | 11.84% | ― | -2.04% | 8.84% | |
74 Outperform | $14.06B | 38.14 | 22.70% | ― | 39.37% | 40.87% | |
70 Outperform | $4.23B | 22.94 | 14.07% | 1.52% | -0.58% | -6.67% | |
63 Neutral | $49.35B | 26.78 | 12.81% | 2.29% | 8.01% | 10.41% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $4.81B | 98.08 | 1.48% | ― | -7.49% | ― | |
55 Neutral | $7.68B | -177.61 | -7.22% | ― | 20.60% | ― |
* Technology Sector Average
IPGP
IPG Photonics
113.94
61.90
118.95%
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IPG Photonics Corporate Events
Business Operations and StrategyLegal Proceedings
IPG Photonics Faces European Patent Ruling on Lasers
Negative
Mar 16, 2026
On March 16, 2026, IPG Photonics said the Local Division of the Unified Patent Court in Düsseldorf ruled that certain uses and designs of its adjustable mode beam lasers infringe a Trumpf European patent, affecting products sold in Germany, F...
Business Operations and StrategyLegal Proceedings
IPG Photonics Faces European Patent Ruling, Plans Appeal
Negative
Feb 25, 2026
On February 25, 2026, IPG Photonics announced that the Local Division of the Unified Patent Court in Mannheim, Germany ruled certain designs of its adjustable mode beam lasers used in welding and cutting infringed Trumpf’s European Patent 2,...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.