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IPG Photonics Corporation (IPGP)
NASDAQ:IPGP
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IPG Photonics (IPGP) AI Stock Analysis

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IPGP

IPG Photonics

(NASDAQ:IPGP)

Rating:59Neutral
Price Target:
$82.00
▲(0.22% Upside)
IPG Photonics' overall stock score is primarily influenced by financial performance challenges, including declining revenue and profitability. Technical analysis provides a positive outlook with bullish indicators, while the earnings call and corporate events offer some optimism through strategic advancements and leadership changes. However, valuation concerns due to negative earnings and the absence of dividends weigh on the score.
Positive Factors
Earnings
IPG's June quarter non-GAAP adjusted net income was above company guidance and 22 cents above investor expectations.
Market Demand
IPG reported results above expectations aided by modest demand improvement in the industrial and e-mobility markets as well as strong growth in medical and advanced applications.
Regional Sales
China sales increased 9.4% sequentially and 14.3% year-over-year, driven by growth in welding, cutting, and advanced applications.
Negative Factors
Product Sales
High power laser sales declined by 11.5% sequentially and 23.6% year-over-year.
Regional Challenges
In Europe, sales were flat sequentially and down year-over-year primarily due to lower demand in cutting and welding applications and exit from Russia.
Revenue
Total revenue decreased 2.7% year over year.

IPG Photonics (IPGP) vs. SPDR S&P 500 ETF (SPY)

IPG Photonics Business Overview & Revenue Model

Company DescriptionIPG 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 MoneyIPG 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 Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive revenue growth, strategic advancements, and successful product launches such as CROSSBOW, despite ongoing challenges in materials processing and uncertain demand environments influenced by tariffs and macroeconomic factors.
Q2-2025 Updates
Positive Updates
Sequential Revenue Growth
Second quarter revenue increased 10% sequentially and 2% year-over-year, excluding divestitures, marking the first year-over-year revenue increase since 2022.
Advanced Applications Record
Achieved another quarter of record revenue in advanced applications driven by higher demand in directed energy, semiconductor, and scientific applications.
CROSSBOW Launch with Lockheed Martin
Announced the delivery of multiple units of the first laser counter UAV solution, CROSSBOW, to Lockheed Martin. The system underwent extensive field testing and customer demonstration.
Micromachining and Medical Growth
Micromachining delivered strong year-over-year revenue growth despite tariff-related shipment delays. Progress in medical with a new urology customer driving revenue growth.
Strategic Investments and Leadership
Continued focus on organic growth with $100 million CapEx planned for 2025 and introduction of new key leaders to support global growth.
Negative Updates
Materials Processing Revenue Decline
Materials processing revenue decreased 6% year-over-year due to divestitures and lower sales in cutting, welding, and additive manufacturing applications.
Uncertain Demand Environment
Despite some signs of stabilization, the demand environment remains uncertain, with ongoing tariff-related pressures and external macroeconomic factors.
Reduced Revenue from North America and Europe
Sales in North America decreased 4% year-over-year, and Europe saw an 11% decline year-over-year, excluding divestitures, with soft industrial demand impacting welding and cutting sales.
Operating Expenses Increase
Operating expenses were higher than the previous year due to strategic investments and organizational strengthening, impacting overall profitability.
Company Guidance
During IPG Photonics' second quarter 2025 conference call, the company provided guidance indicating a positive trajectory despite ongoing challenges. The company achieved a 10% sequential increase and a 2% year-over-year rise in revenue, excluding divestitures, marking its first annual revenue growth since 2022. This growth was fueled by demand improvements across multiple markets and geographies, with a significant contribution from strategic initiatives targeting a $5 billion total addressable market (TAM). IPG is focusing on areas such as medical micromachining and advanced applications, including directed energy and semiconductor solutions. The company highlighted the successful delivery of their CROSSBOW laser defense system to Lockheed Martin, showcasing it at an upcoming defense exhibition. Furthermore, IPG expects third-quarter revenue between $225 million and $255 million, with an adjusted gross margin of 36% to 38%. Despite tariff-related uncertainties, the company remains cautiously optimistic, supported by a book-to-bill ratio of approximately 1, strategic investments, and a balanced capital allocation strategy, which includes $100 million in planned 2025 capital expenditures and continued share repurchases.

IPG Photonics Financial Statement Overview

Summary
IPG Photonics faces significant challenges in revenue and profitability, with a TTM revenue growth rate of -72.7% and negative net profit margins. The balance sheet shows low leverage and a strong equity base, but the negative return on equity highlights profitability concerns. Cash flow generation has weakened, indicating operational difficulties.
Income Statement
45
Neutral
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
60
Neutral
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
50
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue945.99M977.13M1.29B1.43B1.46B1.20B
Gross Profit327.82M338.15M541.70M555.41M696.40M539.00M
EBITDA59.48M75.92M301.19M321.97M462.91M326.06M
Net Income-215.42M-181.53M218.88M109.91M278.42M159.57M
Balance Sheet
Total Assets2.38B2.29B2.70B2.74B3.17B2.94B
Cash, Cash Equivalents and Short-Term Investments899.60M930.19M1.18B1.18B1.51B1.39B
Total Debt16.86M17.96M18.26M38.05M58.13M62.19M
Total Liabilities274.90M264.79M283.51M357.92M423.32M341.59M
Stockholders Equity2.10B2.02B2.42B2.39B2.75B2.59B
Cash Flow
Free Cash Flow64.64M149.37M185.50M102.51M266.59M197.64M
Operating Cash Flow151.07M247.90M295.99M212.65M389.70M285.33M
Investing Cash Flow-361.43M208.73M-237.55M296.95M-416.28M-99.57M
Financing Cash Flow-163.85M-339.62M-236.38M-514.55M-125.07M-10.08M

IPG Photonics Technical Analysis

Technical Analysis Sentiment
Positive
Last Price81.82
Price Trends
50DMA
75.43
Positive
100DMA
68.78
Positive
200DMA
69.33
Positive
Market Momentum
MACD
2.25
Negative
RSI
58.07
Neutral
STOCH
88.15
Negative
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 81.82 is above the 20-day moving average (MA) of 78.71, above the 50-day MA of 75.43, and above the 200-day MA of 69.33, indicating a bullish trend. The MACD of 2.25 indicates Negative momentum. The RSI at 58.07 is Neutral, neither overbought nor oversold. The STOCH value of 88.15 is Negative, 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 34 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$6.59B27.0515.07%1.23%6.23%10.12%
65
Neutral
$5.04B246.0411.57%22.22%
61
Neutral
$35.45B7.89-10.11%1.88%8.47%-9.45%
61
Neutral
$6.28B-9.17%65.12%15.46%
59
Neutral
$3.45B-9.89%-14.77%-261.91%
57
Neutral
$4.41B-9.71%29.66%47.97%
55
Neutral
$2.53B76.584.68%1.86%7.16%-21.24%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IPGP
IPG Photonics
81.82
16.39
25.05%
POWI
Power Integrations
45.10
-16.12
-26.33%
SMTC
Semtech
58.09
16.51
39.71%
SLAB
Silicon Laboratories
134.35
28.01
26.34%
OLED
Universal Display
138.59
-41.95
-23.24%
SITM
SiTime Corporation
241.67
107.51
80.14%

IPG Photonics Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
IPG Photonics Appoints Dr. Bucher as SVP Operations
Positive
Jul 8, 2025

On July 1, 2025, IPG Photonics Corporation appointed Dr. Paulus Bucher as Senior Vice President of Global Operations. Dr. Bucher, who previously held senior roles at Adtran, ADVA, CommScope, and Ericsson, will initially be based in Germany and is expected to relocate to the U.S. upon receiving work permission. His compensation package includes a base salary, participation in the Senior Executive Annual Incentive Plan, and long-term equity incentives. The appointment is part of IPG Photonics’ strategy to enhance its global operations and efficiency, with Dr. Bucher’s extensive experience in managing large-scale transformations and supply chains expected to contribute significantly to the company’s operational goals.

Private Placements and Financing
IPG Photonics Secures New $200 Million Credit Facility
Neutral
Jun 30, 2025

On June 24, 2025, IPG Photonics Corporation entered into a new credit agreement with Bank of America, replacing its previous loan agreement that expired on June 30, 2025. This agreement establishes a $200 million unsecured revolving credit facility, with provisions for interest rates based on the Term Secured Overnight Financing Rate and the company’s Consolidated Net Leverage Ratio. The facility is intended to support working capital, capital expenditures, and general corporate purposes, with potential for increased commitments under certain conditions. The agreement includes customary default provisions, and the company must maintain a specified leverage ratio.

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.Date of analysis: Aug 19, 2025