Why IPG Photonics Corporation Shares Went Dark Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of IPG Photonics Corporation (NASDAQ: IPGP  ) finished the trading day on Tuesday with close to a 6% loss after dropping to a 10% loss early in the morning. Investors seem unhappy with the fact that IPG's upcoming quarter is looking a little soft, despite the fact that the company bested top-line expectations for its fiscal first quarter.

So what: IPG's first-quarter revenue came in at $170.6 million, a 20% year-over-year improvement that also cleared analyst expectations of $168.1 million in revenue. The company's bottom line showed $0.77 in earnings per share, which matched analyst expectations. Looking ahead, IPG now expects to generate between $173 million and $188 million in revenue for the second quarter, which will result in a range of $0.77-$0.92 in EPS. Analysts had modeled a second quarter with $187.1 million in revenue and $0.90 in EPS, so the midpoints of IPG's guidance -- $180.2 million in revenue and $0.85 in EPS -- fall beneath those estimates on both counts.

Now what: It's hard to call this bad guidance, as it IPG's midpoints would represent year-over-year growth of 7% on the top line and 6% on the bottom line. However, this is not particularly strong growth for a company that just posted a year-over-year growth rate of 20% in revenue and 15% in EPS. Slowing growth is always a concern, particularly for a company that's seen its share prices rise primarily on P/E expansion over the past year. Tread cautiously with IPG. It's not a screaming buy today, but it's hardly in the nosebleed-P/E territory it once occupied, either.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2935758, ~/Articles/ArticleHandler.aspx, 10/1/2014 12:15:48 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement