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IPG (IPGP) Soars 5.4%: Is Further Upside Left in the Stock?

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IPG Photonics (IPGP - Free Report) shares soared 5.4% in the last trading session to close at $88.56. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 14.6% loss over the past four weeks.

The recent surge in IPG Photonics share price can be attributed to favorable macro trends such as growing demand for automation and miniaturization, renewable energy and EV. These macro-economic trends are driving the demand for various products of the company such as wielding, marking, systems, cleaning, 3D printing and semiconductor which are expected to reflect in IPG’s topline growth.

This high-powered laser maker is expected to post quarterly earnings of $1.12 per share in its upcoming report, which represents a year-over-year change of -15.8%. Revenues are expected to be $363.53 million, down 2.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For IPG, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on IPGP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

IPG is a member of the Zacks Lasers Systems and Components industry. One other stock in the same industry, Cutera (CUTR - Free Report) , finished the last trading session 4.1% higher at $38.05. CUTR has returned -31.7% over the past month.

For Cutera, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.22. This represents a change of -178.6% from what the company reported a year ago. Cutera currently has a Zacks Rank of #4 (Sell).

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