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IPGP – Market expectations are for Uniform ROA to improve, but management may have concerns about sales, demand, and handheld laser welding

October 28, 2020

  • IPG Photonics Corporation (IPGP:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 37.8x Uniform P/E. At these levels, the market is pricing in bullish expectations in Uniform ROA, but management may have concerns about urology application sales, demand, and handheld laser welding

  • Specifically, management may lack confidence in their ability to maintain soft tissue medical treatments development and improve urology application sales. In addition, they may have concerns about the sustainability of industrial demand recovery signs in China and the stability of high-power nanosecond pulsed lasers demand. Furthermore, they may be overstating the potential of their newest outstanding handheld laser welding solution, and the capabilities of their fiber laser cutting machine