IPG Photonics Corporation (NASDAQ:IPGP) Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
It's been a sad week for IPG Photonics Corporation (NASDAQ:IPGP), who've watched their investment drop 15% to US$62.03 in the week since the company reported its quarterly result. IPG Photonics reported in line with analyst predictions, delivering revenues of US$288m and statutory earnings per share of US$0.47, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for IPG Photonics from nine analysts is for revenues of US$1.22b in 2027. If met, it would imply a solid 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 128% to US$2.16. Before this earnings report, the analysts had been forecasting revenues of US$1.22b and earnings per share (EPS) of US$2.11 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for IPG Photonics
The consensus price target was unchanged at US$118, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic IPG Photonics analyst has a price target of US$152 per share, while the most pessimistic values it at US$78.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that IPG Photonics is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.4% annualised growth until the end of 2027. If achieved, this would be a much better result than the 9.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. So although IPG Photonics' revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around IPG Photonics' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that IPG Photonics' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for IPG Photonics going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for IPG Photonics that you should be aware of.
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