Yahoo Finance Why Is IPG (IPGP) Down 6.9% Since Last Earnings Report?
It has been about a month since the last earnings report for IPG Photonics (IPGP). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is IPG due for a breakout? 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 drivers.
IPG Photonics' Q1 Earnings Beat, Revenues Decrease Y/Y
IPG Photonics reported first-quarter 2023 earnings of $1.26 per share, beating the Zacks Consensus Estimate by 26%.
Revenues of $347.2 million decreased 6.2% on a year-over-year basis but beat the consensus mark by 6.2%. Emerging growth product sales accounted for 45% of revenues.
Unfavorable forex hurt revenue growth by 4% whereas business divestitures reduced it by roughly 1%.
Quarterly Details
Materials processing (90% of total revenues) decreased 8% year over year. The downside can be attributed to lower revenues from cutting and marking applications.
Revenues from other applications increased 10% year over year due to higher revenues from advanced applications and medical.
Sales of high-power CW lasers were down 8% year over year due to lower demand in high-power cutting applications. Pulsed laser sales declined 16% year over year due to lower demand in cutting and marking applications.
Sales decreased 7% in Europe, 1% in North America and 22% in China, on a year-over-year basis. Sales jumped 68% year over year in Japan.
IPG Photonics reported a gross margin of 42.3%, down 410 basis points on a year-over-year basis.
Balance Sheet
As of Mar 31, 2023, IPG Photonics had $1.07 billion in cash & cash equivalents compared with $698.2 million as of Dec 31, 2022.
Guidance
For second-quarter 2023, IPG Photonics anticipates sales to be $325-$355 million. Earnings are projected between $1.05 per share and $1.35 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 10.18% due to these changes.
VGM Scores
At this time, IPG has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise IPG has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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IPG Photonics Corporation (IPGP) : Free Stock Analysis Report
