Why IPG Photonics (IPGP) Stock Is Nosediving

Kayode Omotosho /
2024/02/13 12:45 pm EST

What Happened:

Shares of fiber laser manufacturer IPG Photonics (NASDAQ:IPGP) fell 14.2% in the afternoon session after the company reported fourth-quarter results and provided revenue guidance for the next quarter that fell below Wall Street's expectations. In addition, EPS missed. 

On the other hand, revenue exceeded expectations during the quarter, driven by higher sales in welding, cleaning, 3D printing, and medical applications. However, the topline growth was offset by "continued soft industrial demand across many major geographies and lower sales in e-mobility applications in China." Overall, this was a challenging quarter, with the outlook likely weighing on shares.

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What is the market telling us:

IPG Photonics's shares are somewhat volatile and over the last year have had 4 moves greater than 5%. But moves this big are very rare even for IPG Photonics and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 8 months ago, when the company gained 16.8% on the news that Raymond James analyst upgraded the stock's rating from Market Perform (Hold) to Outperform (Buy) and maintained a price target of $170. The price target was 27% above the market price when the upgrade was announced.

IPG Photonics is down 15.8% since the beginning of the year, and at $89.77 per share it is trading 35.7% below its 52-week high of $139.71 from July 2023. Investors who bought $1,000 worth of IPG Photonics's shares 5 years ago would now be looking at an investment worth $600.37.

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