IPG Photonics (IPGP) AI Stock Analysis

• Market Cap: $3.27B
• Dividend Yield: N/A
• Average Volume (3M): 278.94K
• Price to Earnings (P/E): 133.2
• 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: 288,500
• 30 Day Avg. Volume: 278,944
• 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: 0.77
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 6.75
• Enterprise Value/Ebitda: 25.54
• 1Y Price Target: $93.63
• Price Target Upside: 16.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.39
• Revenue Forecast (FY): $1.05B

• Rating: 58 Neutral
• Price Target: $80.00 ▼(-0.04% Downside)

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 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 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: Positive
• Last Price: 80.03
• 50DMA: Positive
• 100DMA: Negative
• 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 80.03 is above the 20-day moving average (MA) of 75.65, above the 50-day MA of 78.90, and above the 200-day MA of 74.30, indicating a bullish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 57.86 is Neutral, neither overbought nor oversold. The STOCH value of 69.85 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
PLAB	74 Outperform	$1.86B	14.95	11.89%	―	-2.04%	8.84%
NVMI	73 Outperform	$12.61B	57.04	23.58%	―	39.37%	40.87%
ASX	69 Neutral	$40.72B	36.34	11.17%	2.29%	8.01%	10.41%
SMTC	69 Neutral	$6.86B	253.98	13.39%	―	20.60%	―
OLED	66 Neutral	$5.70B	25.82	13.30%	1.52%	-0.58%	-6.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IPGP	58 Neutral	$3.27B	133.18	1.22%	―	-7.49%	―