IPG Photonics posted fourth-quarter earnings of $0.92 per share versus a loss of $0.08 per share in the year-ago period, reflecting higher revenue, cost reductions, and improved product mix. However, the bottom-line result fell short of Street estimates of $0.98 per share.
Shares of the optical fiber laser manufacturer gained 1.4% on Feb. 16 as 4Q revenues increased 10% to $336.6 million year-over-year and exceeded analysts’ expectations of $311.4 million.
IPG’s (IPGP) CEO Valentin Gapontsev, said, “We are very pleased with our fourth quarter results as we delivered revenue that was 10% higher than the fourth quarter 2019 and was above the top end of our guidance range.”
Furthermore, the company’s book-to-bill ratio was above one, reflecting continued momentum in the order flow. (See IPG Photonics stock analysis on TipRanks)
For 1Q, IPG expects revenues to come in between $310 million and $340 million. Earnings are forecasted to be in the range of $0.90-$1.20 per share.
Following the earnings release, Needham analyst James Ricchiuti reiterated a Buy rating and price target of $280 (9.2% upside potential). In a note to investors, Ricchiuti wrote, “We believe the expanding diversification of IPG’s business both from a new-product application and geographic standpoint are setting the stage for further upside to estimates in 2021 and 2022.”
Overall, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus based on 3 Buys and 1 Hold. The average analyst price target of $276.77 implies upside potential of about 7.9% to current levels. Shares gained about 83.9% over the past year.