IPG Photonics (IPGP) AI Stock Analysis

• Market Cap: $3.70B
• Dividend Yield: N/A
• Average Volume (3M): 226.89K
• Price to Earnings (P/E): 146.3
• Beta (1Y): 1.50
• Revenue Growth: -7.49%
• EPS Growth: N/A
• Country: US
• Employees: 4,740
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.18
• Shares Outstanding: 42,124,480
• 10 Day Avg. Volume: 283,837
• 30 Day Avg. Volume: 226,890
• PEG Ratio: 0.09
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 3.30
• P/FCF Ratio: 21.58
• Enterprise Value/Market Cap: 0.68
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 6.75
• Enterprise Value/Ebitda: 27.15
• 1Y Price Target: $98.25
• Price Target Upside: 11.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.63
• Revenue Forecast (FY): $975.02M

• Rating: 68 Neutral
• Price Target: $96.00 ▲(9.17% Upside)

IPG Photonics' overall stock score is driven by its strong balance sheet and positive technical indicators, despite valuation concerns due to a high P/E ratio. The earnings call provided a positive outlook with strong growth in key areas, although challenges remain in North America sales and operating expenses.

Positive Factors

Medical Segment Expansion

The FDA clearance for new medical laser systems enhances IPG's product portfolio, potentially increasing revenue from the medical segment and strengthening its market position in healthcare technology.

Advancements in Directed Energy

The introduction of the CROSSBOW laser defense system positions IPG as a key player in defense technology, potentially opening new revenue streams and enhancing its competitive edge in the defense sector.

Strong Balance Sheet

A strong balance sheet with low leverage provides IPG Photonics with financial stability and flexibility to invest in growth opportunities and withstand market fluctuations.

Negative Factors

North America Sales Decline

Declining sales in North America could indicate weakening market presence or competitive pressures, potentially impacting overall revenue growth and market share in a key region.

Operating Expenses

High operating expenses can strain profitability and cash flow, limiting the company's ability to invest in other strategic initiatives and potentially affecting long-term financial health.

Pressure on Margins

Margin pressure can reduce profitability and affect the company's ability to reinvest in growth, potentially impacting its competitive position and long-term financial performance.

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 hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; and high-power optical fiber delivery cables, fiber couplers, beam switches, chillers, scanners, and other accessories. It also provides erbium-doped fiber and Raman amplifiers, and integrated communications systems, which are deployed in broadband networks; and ytterbium and thulium specialty fiber amplifiers and broadband light sources. In addition, the company offers integrated laser systems; 2D compact flat sheet cutter systems and multi-axis systems; welding seam stepper and picker, a fiber laser welding tool; high precision laser systems; specialized fiber laser systems; and optical transceiver and transponder modules for interconnecting electronic equipment, including Ethernet switches, IP routers and DWDM/SONET/SDH optical transport modules within telecommunications, cable multi-system operators, and data center networking applications. It's lasers and amplifiers are also used in materials processing, communications, and medical and advanced applications. The company markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. IPG Photonics Corporation was founded in 1990 and is headquartered in Oxford, Massachusetts.

How the Company Makes Money

IPG Photonics generates revenue primarily through the sale of its fiber lasers and related products. The company operates on a direct sales model, targeting industrial customers who require high-precision laser solutions for cutting, welding, marking, and engraving applications. Key revenue streams include the sale of laser systems, replacement parts, and service contracts. Additionally, IPG benefits from long-term partnerships with manufacturers and distributors in various industries, which helps to expand its market reach and drive sales. The company also invests in research and development to innovate and enhance its product offerings, ensuring a competitive edge in the rapidly evolving laser technology market.

IPG Photonics Financial Statement Overview

Summary

IPG Photonics is facing significant challenges in revenue and profitability, as reflected in its income statement. While the balance sheet shows low leverage and a strong equity base, the negative return on equity highlights profitability concerns. Cash flow generation has weakened, indicating operational difficulties. Overall, the company needs to address its declining revenue and profitability to improve its financial health.

Income Statement

IPG Photonics has experienced a significant decline in revenue with a TTM revenue growth rate of -72.7%. The gross profit margin has decreased from 42.1% in 2023 to 34.7% in the TTM period. Additionally, the company is facing negative net profit margins, indicating losses. The EBIT margin has turned negative, indicating operational challenges. Overall, the income statement reflects declining performance and profitability issues.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.008, indicating low leverage and financial stability. However, the return on equity has turned negative in the TTM period, reflecting profitability challenges. The equity ratio remains strong, suggesting a solid financial foundation despite recent performance issues.

Cash Flow

Operating cash flow has decreased significantly, with a TTM operating cash flow to net income ratio of 0.70, indicating reduced cash generation efficiency. Free cash flow has also declined, with a negative growth rate of -42.0%. The free cash flow to net income ratio remains positive, suggesting some ability to generate cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	963.64M	977.13M	1.29B	1.43B	1.46B	1.20B
Gross Profit	372.73M	338.15M	541.70M	555.41M	696.40M	539.00M
EBITDA	92.69M	75.92M	301.19M	321.97M	449.09M	326.06M
Net Income	25.64M	-181.53M	218.88M	109.91M	278.42M	159.57M
Balance Sheet
Total Assets	2.38B	2.29B	2.70B	2.74B	3.17B	2.94B
Cash, Cash Equivalents and Short-Term Investments	870.38M	930.19M	1.18B	1.18B	1.51B	1.39B
Total Debt	17.36M	17.96M	18.26M	38.05M	58.13M	43.74M
Total Liabilities	276.15M	264.79M	283.51M	357.92M	423.32M	341.59M
Stockholders Equity	2.10B	2.02B	2.42B	2.39B	2.75B	2.59B
Cash Flow
Free Cash Flow	36.25M	149.37M	185.50M	102.51M	266.59M	197.64M
Operating Cash Flow	120.32M	247.90M	295.99M	212.65M	389.70M	285.33M
Investing Cash Flow	-555.45M	208.73M	-237.55M	296.95M	-416.28M	-99.57M
Financing Cash Flow	-105.93M	-339.62M	-236.38M	-514.55M	-125.07M	-10.08M

IPG Photonics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 87.94 is above the 20-day moving average (MA) of 86.21, above the 50-day MA of 83.68, and above the 200-day MA of 71.29, indicating a bullish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 55.68 is Neutral, neither overbought nor oversold. The STOCH value of 74.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IPGP.

IPG Photonics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	81 Outperform	$9.39B	40.37	23.58%	―	39.37%	40.87%
PLAB	73 Outperform	$1.28B	12.30	9.89%	―	-1.79%	-22.58%
IPGP	68 Neutral	$3.70B	146.35	1.22%	―	-7.49%	―
ASX	67 Neutral	$33.69B	14.61	11.17%	2.34%	8.01%	10.41%
SMTC	65 Neutral	$6.45B	304.45	11.57%	―	22.22%	―
OLED	64 Neutral	$6.98B	28.64	13.30%	1.40%	-0.58%	-6.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

IPG Photonics Corporate Events

IPG Photonics Reports Strong Q3 2025 Revenue Growth

IPG Photonics Corporation, a leader in high-power fiber lasers and amplifiers, primarily serves the materials processing industry with innovative laser solutions aimed at enhancing productivity and reducing costs. In its third-quarter 2025 financial results, IPG Photonics reported an 8% increase in revenue year-over-year, reaching $250.8 million, driven by business wins and strategic initiatives. The company also saw a significant improvement in its gross margin, which rose to 39.5%, up from 23.2% in the previous year.

IPG Photonics’ Earnings Call Highlights Growth and Challenges

IPG Photonics’ recent earnings call painted a picture of robust growth and strategic progress, despite facing some regional sales challenges and elevated operating expenses. The sentiment expressed during the call was generally positive, highlighting the company’s strong financial performance and promising developments in key segments such as medical and directed energy. While North America sales saw a decline, the overall outlook remains optimistic due to successful product launches and strategic initiatives.

IPG Photonics Updates Executive Severance and Compensation Plans

On September 30, 2025, IPG Photonics‘ Board of Directors approved significant updates to their Executive Severance Plan and other executive compensation structures. These changes include revised severance payments and performance-based equity awards for executives, particularly in the event of a Change in Control, and the termination of certain senior vice presidents’ employment agreements to align with the new plan. Additionally, the Senior Executive Annual Incentive Plan was amended to coordinate with the Severance Plan, and the Non-Employee Director Compensation Plan was updated to increase the annual cash retainer for the Non-Executive Chair.

The most recent analyst rating on (IPGP) stock is a Buy with a $97.00 price target. To see the full list of analyst forecasts on IPG Photonics stock, see the IPGP Stock Forecast page.