IPG Photonics Stock To $84?
IPG Photonics (IPGP) stock has fallen 12% during the past week, and is currently trading at $116.47. Our multi-factor assessment suggests that it may be time to sell IPGP stock. We have, overall, a pessimistic view of the stock, and a price of $84 may not be out of reach. We believe there are a few things to fear in IPGP stock given its overall Moderate operating performance and financial condition. But keeping in mind its High valuation, we think that the stock is Unattractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | High |
| What you get: | |
| Growth | Inconsistent |
| Profitability | Very Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | Moderate |
| Operating Performance | Moderate |
| Stock Opinion | Unattractive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $4.9 Bil in market cap, IPG Photonics provides high-performance fiber lasers, amplifiers, and diode lasers for materials processing, communications, medical, and advanced applications, including hybrid fiber-solid state lasers with green and ultraviolet wavelengths.
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[1] Valuation Looks High
| IPGP | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 5.0 | 3.2 |
| Price-to-Earnings Ratio | 161.8 | 24.3 |
| Price-to-Free Cash Flow Ratio | -1456.4 | 20.4 |
This table highlights how IPGP is valued vs broader market. For more details see: IPGP Valuation Ratios
[2] Growth Is Inconsistent
- IPG Photonics has seen its top line shrink at an average rate of -10.4% over the last 3 years
- Its revenues have grown 2.7% from $977 Mil to $1.0 Bil in the last 12 months
- Also, its quarterly revenues grew 17.1% to $274 Mil in the most recent quarter from $234 Mil a year ago.
| IPGP | S&P 500 | |
|---|---|---|
| 3-Year Average | -10.4% | 5.7% |
| Latest Twelve Months* | 2.7% | 6.6% |
| Most Recent Quarter (YoY)* | 17.1% | 7.2% |
This table highlights how IPGP is growing vs broader market. For more details see: IPGP Revenue Comparison
[3] Profitability Appears Very Weak
- IPGP last 12 month operating income was $23 Mil representing operating margin of 2.3%
- With cash flow margin of 7.5%, it generated nearly $75 Mil in operating cash flow over this period
- For the same period, IPGP generated nearly $31 Mil in net income, suggesting net margin of about 3.1%
| IPGP | S&P 500 | |
|---|---|---|
| Current Operating Margin | 2.3% | 18.7% |
| Current OCF Margin | 7.5% | 20.9% |
| Current Net Income Margin | 3.1% | 12.8% |
This table highlights how IPGP profitability vs broader market. For more details see: IPGP Operating Income Comparison
[4] Financial Stability Looks Very Strong
- IPGP Debt was $17 Mil at the end of the most recent quarter, while its current Market Cap is $4.9 Bil. This implies Debt-to-Equity Ratio of 0.3%
- IPGP Cash (including cash equivalents) makes up $839 Mil of $2.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 34.6%
| IPGP | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 0.3% | 21.2% |
| Current Cash-to-Assets Ratio | 34.6% | 7.3% |
[5] Downturn Resilience Is Moderate
IPGP saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- IPGP stock fell 67.9% from a high of $258.58 on 19 January 2021 to $83.02 on 12 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $153.91 on 16 February 2026 , and currently trades at $116.47
| IPGP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -67.9% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- IPGP stock fell 31.5% from a high of $149.97 on 13 February 2020 to $102.74 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 8 May 2020
| IPGP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -31.5% | -33.9% |
| Time to Full Recovery | 35 days | 148 days |
2008 Global Financial Crisis
- IPGP stock fell 75.1% from a high of $27.47 on 30 January 2007 to $6.83 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 November 2010
| IPGP | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -75.1% | -56.8% |
| Time to Full Recovery | 623 days | 1,480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read IPGP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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