After a slow start to the year, Rofin-Sinar (NASDAQ:RSTI) returned to form in its fiscal second and third quarters, handily beating analyst estimates. But can the laser-maker end the year with a bang? We'll find out when it reports its fiscal year-end and Q4 results tomorrow morning.

What analysts say:

  • Buy, sell, or waffle? A full dozen analysts follow Rofin-Sinar, with buy ratings outnumbering holds 10 to 2.
  • Revenue. On average, they're looking for 9% sales growth to $126.5 million.
  • Earnings. Profits are predicted to rise 10% to $0.96 per share.

What management says:
With three quarters down, and just one left to go (going, gone!), CEO Gunther Braun pronounced himself "very proud" of Rofin-Sinar's performance back in August. The company posted "record highs in order entry, sales, backlog and net income," and Braun promised that the advent of a new "high-power fiber laser for material processing applications," introduced in June, "should help us grow our business in the long run."

What management does:
So far this year, Rofin-Sinar has found its greatest success in seeking such growth in Europe, where sales are up 28% year over year. In contrast, sales in the Americas have fallen 14%. Profit margins, while also on the decline, remain far above what Coherent (NASDAQ:COHR) and GSI Group (NASDAQ:GSIG) pull down. However, rival fiber laser-maker (and Motley Fool Rule Breakers newsletter pick) IPG Photonics (NASDAQ:IPGP) seems to be gaining ground on Rofin-Sinar, growing its sales faster and producing better margins on those sales.

Margins

3/06

6/06

9/06

12/06

3/07

6/07

Gross

42.6%

43.1%

42.4%

41.9%

41.7%

41.7%

Operating

17.8%

18.2%

17.6%

17.1%

16.8%

16.8%

Net

11.4%

12%

11.8%

11.4%

11.3%

11.3%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
For a stock that has performed incredibly well over the past several years, Rofin-Sinar has gotten precious little virtual ink on these pages in recent months. I aim to remedy that. Rest assured that after Rofin-Sinar reports tomorrow, I'll have a report out on it in short order. A company that Fool co-founder Tom Gardner praises for its "focused, forthright management team," "broad business base," and "strong operating cash flow sufficient to fund its growth, pay down debt, and fund strategic acquisitions" deserves no less.

While I may have been asleep at the switch on this one, the lads over at Motley Fool Hidden Gems have kept their eye on the laser. (Ouch!) Read their recent semiannual review of this sterling near-three-bagger when you take a free trial of the service.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.