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Aggressive Growth

IPG Photonics (IPGP - Snapshot Report) is a Zacks #1 Rank (Strong Buy) that has seen estimates surge since it was featured back in March.

Demand is strong and led to a blowout quarter, optimistic guidance and has them as the top rated company in its peer group.

Company Description

IPG Photonics makes high-powered fiber lasers and amplifiers. The products are used in the materials processing, medical, telecommunications and other industries.

Beat Expectations

On May 3 the company reported that first-quarter momentum nearly doubled, rising $48.8 million to $100 million. This is a fairly easy comp given the state of the industry at that time, but this is impressive because it is typically a slow season.

IPG Photonics ended the period with over $160 million in cash after generating $13.8 million from operations. Net income came out to $0.47 per share, which was 4 cents higher than the Zacks Consensus Estimate and well ahead of the $0.07 a year ago.

Optimism Moving Forward

The company said order flow has been strong and their products are being accepted into many areas. They see revenue coming in between $102 and $110 million next quarter.

Analysts raised full-year estimates on the news, pushing the consensus for this year 34 cents higher, to $2.23. Next year's average forecast is also up 34 cents, to $2.80. IPG Photonics earned $1.13 in 2010, so projected growth rates are now 97% and 26%, respectively.

Great Comparisons

IPG Photonics is at the head of its industry and after looking at a few key metrics, it is easy to see why.

IPGP's net profit margin is an impressive 21%, while the industry average is in the red. The return on equity is above 24%, while the norm for its peer group is just under 3%.

And this is a hot industry, coming in at 25th out of 265 groups. IPGP is at the top of the 12 company group.

Great Trends

While it is one thing to say how fast the estimates are rising, I don't think words can do it justice. Take a look at this chart below that shows just how rapidly the forecasts for IPGP are growing.

Read the March 15th Feature Here

IPG Photonics  - ticker IPGP >
 
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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

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