Is It Too Late To Consider Buying IPG Photonics Corporation (NASDAQ:IPGP)?

IPG Photonics Corporation (NASDAQ:IPGP), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$127 at one point, and dropping to the lows of US$109. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether IPG Photonics' current trading price of US$111 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at IPG Photonics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for IPG Photonics

What's The Opportunity In IPG Photonics?

The stock is currently trading at US$111 on the share market, which means it is overvalued by 38% compared to my intrinsic value of $80.64. This means that the opportunity to buy IPG Photonics at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that IPG Photonics’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from IPG Photonics?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for IPG Photonics. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? IPGP’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IPGP should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on IPGP for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for IPGP, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about IPG Photonics as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 2 warning signs with IPG Photonics, and understanding these should be part of your investment process.

If you are no longer interested in IPG Photonics, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.