IPG Photonics (IPGP) AI Stock Analysis

• Market Cap: $3.15B
• Dividend Yield: N/A
• Average Volume (3M): 250.22K
• Price to Earnings (P/E): 125.1
• Beta (1Y): 1.51
• 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: 270,553
• 30 Day Avg. Volume: 250,217
• 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: 0.80
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 6.75
• Enterprise Value/Ebitda: 25.54
• 1Y Price Target: $98.25
• Price Target Upside: 30.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.61
• Revenue Forecast (FY): $976.65M

• Rating: 58 Neutral
• Price Target: $80.00 ▲(6.43% Upside)

IPG Photonics' overall score is primarily influenced by its strong balance sheet and positive earnings call outlook, which are offset by bearish technical indicators and high valuation concerns. The company's strategic initiatives and product launches provide a positive outlook, but challenges in North America sales and operating expenses remain significant.

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 is a leading provider of high-performance fiber lasers and amplifiers for diverse applications across various industries, including materials processing, telecommunications, and medical technologies. The company specializes in developing innovative laser systems that are known for their efficiency and reliability. Founded in 1990 and headquartered in Oxford, Massachusetts, IPG operates in the laser technology sector and offers a broad range of products, including fiber lasers, solid-state lasers, and laser systems for cutting, welding, marking, and engraving.

How the Company Makes Money

IPG Photonics generates revenue primarily through the sale of its fiber laser systems and related products. The company has a diversified revenue model that includes the sale of laser systems, which constitute the largest portion of its sales, along with related services such as installation, maintenance, and repairs. Additionally, IPG offers components like laser diodes and amplifiers, which serve as significant revenue streams. The company benefits from strong demand across various sectors, including industrial manufacturing, automotive, aerospace, and medical devices. Key partnerships with manufacturers and distributors enhance its market reach. Furthermore, the growth in automation and technological advancements in laser applications contribute to its earnings, as industries increasingly adopt laser technology for efficiency and precision.

IPG Photonics Financial Statement Overview

Summary

IPG Photonics maintains a strong balance sheet with low leverage, which is crucial in the semiconductor industry. However, the income statement shows pressure on margins and profitability, while the cash flow statement indicates challenges in sustaining free cash flow growth. The company needs to focus on improving operational efficiency and cash conversion to enhance its financial health.

Income Statement

IPG Photonics shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a slight revenue growth of 1.87%, but the company has faced challenges with declining margins. The gross profit margin has decreased over the years, and the net profit margin is significantly lower at 2.66% compared to previous years. The EBIT and EBITDA margins have also contracted, indicating pressure on operational efficiency. Despite these challenges, the company has managed to return to profitability in the TTM period after a loss in the previous year.

Balance Sheet

The balance sheet of IPG Photonics remains strong with a low debt-to-equity ratio, indicating minimal leverage and financial risk. The equity ratio is healthy, reflecting a solid capital structure. However, the return on equity has decreased over the years, suggesting reduced profitability from shareholders' equity. The company's ability to maintain a robust balance sheet amidst fluctuating income statement metrics is a positive aspect.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, with a significant drop of 43.93% in the TTM period. The operating cash flow to net income ratio is moderate, indicating that the company generates reasonable cash from its operations relative to its net income. However, the free cash flow to net income ratio has decreased, reflecting challenges in converting income into free cash flow. Overall, the cash flow position is stable but shows signs of strain.

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	98.56M	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: Negative
• Last Price: 75.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IPGP, the sentiment is Negative. The current price of 75.17 is below the 20-day moving average (MA) of 79.18, below the 50-day MA of 82.46, and above the 200-day MA of 73.22, indicating a neutral trend. The MACD of -1.33 indicates Positive momentum. The RSI at 38.28 is Neutral, neither overbought nor oversold. The STOCH value of 6.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$9.19B	41.06	23.58%	―	39.37%	40.87%
PLAB	74 Outperform	$1.94B	14.36	11.89%	―	-2.04%	8.84%
ASX	69 Neutral	$31.63B	28.39	11.17%	2.39%	8.01%	10.41%
SMTC	69 Neutral	$6.21B	233.43	13.39%	―	20.60%	―
OLED	66 Neutral	$5.48B	24.82	13.30%	1.56%	-0.58%	-6.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IPGP	58 Neutral	$3.15B	125.10	1.22%	―	-7.49%	―

IPG Photonics Corporate Events

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.