Earnings Miss: IPG Photonics Corporation Missed EPS By 11% And Analysts Are Revising Their Forecasts

Last week, you might have seen that IPG Photonics Corporation (NASDAQ:IPGP) released its quarterly result to the market. The early response was not positive, with shares down 6.0% to US$80.40 in the past week. It was not a great result overall. While revenues of US$258m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit US$0.45 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for IPG Photonics

Taking into account the latest results, the current consensus, from the ten analysts covering IPG Photonics, is for revenues of US$1.01b in 2024. This implies an uncomfortable 8.8% reduction in IPG Photonics' revenue over the past 12 months. Statutory earnings per share are forecast to fall 16% to US$2.68 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.10b and earnings per share (EPS) of US$2.72 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

It will come as no surprise then, that the consensus price target fell 6.8% to US$94.00following these changes. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on IPG Photonics, with the most bullish analyst valuing it at US$106 and the most bearish at US$68.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 17% by the end of 2024. This indicates a significant reduction from annual growth of 0.2% 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 7.2% 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 most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of IPG Photonics' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. 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..

It is also worth noting that we have found 1 warning sign for IPG Photonics that you need to take into consideration.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com