IPGP - Embedded Expectations Analysis - 2021 03 24
IPG Photonics Corporation (IPGP:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 34.5x Uniform P/E. At these levels, the market is pricing in bullish expectations in Uniform ROA, but management may have concerns about pulsed laser sales, R&D investments in fiber laser technology, and the impact of production delaysSpecifically, management may lack confidence in their ability to improve order growth in emerging markets, secure long-term opportunities for lasers in the electric vehicle battery market, and sustain revenue growth, particularly for pulsed lasers. Moreover, they may have concerns about their R&D investments in fiber laser technology and declines in capex, driven by product delays. Management may also lack confidence in their ability to control their operating expenses, further ramp up production to meet demand increases, and meet development deadlines for their new generation of analog and coherent digital silicon photonic devices. In addition, they may be exaggerating their leadership position across core industrial markets as well as the potential and breadth of their product offerings
IPG Photonics is a developer and manufacturer of a line of fiber lasers, fiber amplifiers and diode lasers that are used in various applications, primarily in materials processing. The company designs and manufactures a range of optical fiber-based lasers and amplifiers. The company also makes packaged diodes, direct diode lasers, laser systems and communications components and systems. A majority of the company's products are designed to be used as general-purpose energy or light sources.
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