The 10-second takeaway
For the quarter ended Dec. 31 (Q4), IPG Photonics beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share improved.
Margins dropped across the board.
IPG Photonics logged revenue of $129.1 million. The 10 analysts polled by S&P Capital IQ foresaw revenue of $127.1 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $101 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.66. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.63 per share on the same basis. GAAP EPS of $0.64 for Q3 were 14% higher than the prior-year quarter's $0.56 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.8%, 120 basis points worse than the prior-year quarter. Operating margin was 36.1%, 180 basis points worse than the prior-year quarter. Net margin was 25.2%, 160 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $128.1 million. On the bottom line, the average EPS estimate is $0.64.
Next year's average estimate for revenue is $479.0 million. The average EPS estimate is $2.42.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,307 members rating the stock outperform and 31 members rating it underperform. Among 502 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 496 give IPG Photonics a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IPG Photonics is outperform, with an average price target of $58.56.
Over the decades, small-cap stocks like IPG Photonics have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add IPG Photonics to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of IPG Photonics. Motley Fool newsletter services have recommended buying shares of IPG Photonics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.