IPG Photonics Corp
(IPGP - Snapshot Report
) is the top rated stock in a very hot industry.
After coming in ahead of expectations in the most recent quarter, estimates for this Zacks #1 Rank (Strong Buy) are looking extremely bullish.
IPG Photonics makes high-powered fiber lasers and amplifiers. The products are used in the materials processing, medical, telecommunications and other industries.
Revenue Jumps 86%
On Feb 25 IPG Photonics announced an 86% increase in fourth-quarter revenues, to $101 million. Annually, the top line is up 61%, to $299 million.
Margins for the company have ballooned, pushing earnings even higher. Net income for the quarter was $27.1 million, up from just $3.1 million a year ago. Annual net income is up 10 fold, to $54 million.
Earnings broke down to $0.56 per share, up from just $0.07 a year ago. That figure was 2 cents better than the Zacks Consensus Estimate, giving IPG Photonics its fourth consecutive earnings surprise.
A Bright Future
Analysts agreed with the company's bullish outlook on 2011 and quickly raised full-year estimates. The average forecast for this year jumped 61 cents, to $1.90.
Next year's projections are up 80 cents on average, to $2.35. Last year IPG Photonics made $1.13 per share, making the expected growth rates 68% for this year and another 24% in 2012.
Cream of the Crop
Currently IPG Photonics' industry is ranked 16th out of 265 and IGP is the top rated of the 11 stocks in the peer group. Their net profit margin of 18% is 3 times the industry average. The company has a 19.5% ROE, which is more than double the norm for the group.
Expectations for IPGP have spiked recently. You can see below that estimates were recovering gradually, but the recent surge has pushed the forecasts almost off the charts.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service