What happened

Shares of IPG Photonics (NASDAQ:IPGP) rose 15.1% in October 2017, according to data from S&P Global Market Intelligence. The maker of lasers and fiber-optic components used to build optical networking systems and industrial manufacturing tools started rising on bullish analyst notes, then finished the job with an earnings-based 3% jump on the last day of October.

So what

In the third quarter of 2017, IPG's top-line sales rose 48% year over year to $393 million. Further down the income statement, GAAP earnings increased by 64% to land at $2.11 per diluted share. Analysts would have settled for earnings of $1.82 per share on revenue near $366 million.

A fiber laser cutting through sheet steel.

Image source: Getty Images.

Now what

These numbers proved the bullish analysts absolutely right, and then some. IPG's solid report rested on 70% sales growth in China and 50% higher European revenues, offset by just 10% higher sales in Japan. The company enjoyed strong demand for high-powered industrial lasers, led by cutting and welding applications as well as a 104% sure in orders for quasi-continuous wave, or QCW, lasers -- an extremely high-powered fiber laser used in welding and drilling systems.

IPG shareholders have enjoyed a market-crushing return of 136% over the last year, leaving the stock a bit overheated. Trading at a generous 37 times trailing earnings and 10 times sales, IPG Photonics' shares might be overdue for a correction. Therefore, I'm content to watch this laser-powered lightshow from the sidelines for now.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends IPG Photonics. The Motley Fool has a disclosure policy.