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IPG (IPGP) Up 1.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for IPG Photonics (IPGP - Free Report) . Shares have added about 1.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IPG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
IPG Photonics reported fourth-quarter 2023 earnings of 89 cents per share, lagging the Zacks Consensus Estimate by 6.32%. The company reported a loss of $1.91 per share in the year-ago quarter.
Revenues of $299 million decreased 10.4% on a year-over-year basis but beat the consensus mark by 4.5%. Unfavorable forex hurt revenue growth by 2%.
Emerging growth product sales accounted for 46% of revenues and benefited from growth in handheld welder, medical and higher beam delivery revenues.
Quarterly Details
Materials processing (87% of total revenues) decreased 12% year over year. The downside can be attributed to lower revenues from cutting. Revenues from other applications increased 4% year over year.
Sales of high-power CW lasers were down 19% year over year due to lower demand, high customer inventories and increased competition in cutting applications in China.
Pulsed laser sales declined 40% year over year due to lower demand in solar cell manufacturing and foil-cutting applications.
Sales decreased 3% in North America, 25% in China and 5% in Japan on a year-over-year basis. However, sales increased 1% year over year in Europe.
IPG Photonics reported a gross margin of 38.2% compared with 18.2% in the year-ago quarter.
Balance Sheet
As of Dec 31, 2023, IPG Photonics had $1.18 billion in cash & cash equivalents compared with $1.10 billion as of Sep 30, 2023.
Guidance
For first-quarter 2024, IPG Photonics anticipates sales to be $235-$265 million. Earnings are projected between 30 cents per share and 60 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -52.81% due to these changes.
VGM Scores
At this time, IPG has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise IPG has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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IPG (IPGP) Up 1.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for IPG Photonics (IPGP - Free Report) . Shares have added about 1.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IPG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
IPG Photonics' Q4 Earnings Lag, Revenues Decrease Y/Y
IPG Photonics reported fourth-quarter 2023 earnings of 89 cents per share, lagging the Zacks Consensus Estimate by 6.32%. The company reported a loss of $1.91 per share in the year-ago quarter.
Revenues of $299 million decreased 10.4% on a year-over-year basis but beat the consensus mark by 4.5%. Unfavorable forex hurt revenue growth by 2%.
Emerging growth product sales accounted for 46% of revenues and benefited from growth in handheld welder, medical and higher beam delivery revenues.
Quarterly Details
Materials processing (87% of total revenues) decreased 12% year over year. The downside can be attributed to lower revenues from cutting. Revenues from other applications increased 4% year over year.
Sales of high-power CW lasers were down 19% year over year due to lower demand, high customer inventories and increased competition in cutting applications in China.
Pulsed laser sales declined 40% year over year due to lower demand in solar cell manufacturing and foil-cutting applications.
Sales decreased 3% in North America, 25% in China and 5% in Japan on a year-over-year basis. However, sales increased 1% year over year in Europe.
IPG Photonics reported a gross margin of 38.2% compared with 18.2% in the year-ago quarter.
Balance Sheet
As of Dec 31, 2023, IPG Photonics had $1.18 billion in cash & cash equivalents compared with $1.10 billion as of Sep 30, 2023.
Guidance
For first-quarter 2024, IPG Photonics anticipates sales to be $235-$265 million. Earnings are projected between 30 cents per share and 60 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -52.81% due to these changes.
VGM Scores
At this time, IPG has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise IPG has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.