Bearish: Analysts Just Cut Their IPG Photonics Corporation (NASDAQ:IPGP) Revenue and EPS estimates

One thing we could say about the analysts on IPG Photonics Corporation (NASDAQ:IPGP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from ten analysts covering IPG Photonics is for revenues of US$1.2b in 2024, implying a chunky 9.2% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to crater 33% to US$3.17 in the same period. Before this latest update, the analysts had been forecasting revenues of US$1.3b and earnings per share (EPS) of US$4.98 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for IPG Photonics

The consensus price target fell 11% to US$111, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the IPG Photonics' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 9.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 1.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IPG Photonics is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for IPG Photonics. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for IPG Photonics going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.