There is little doubt that IGP Photonics Corporation (IPGP) is a great stock to invest in. We will look at how the company is financially, but it is also important to examine the prospects of IPGP, and how it is shaping up for the future. IPGP is in a unique sector, and it is currently performing very well.
IPGP’s second quarter results have continued to be impress investors, as the company increased revenue growth by 14% thanks to an 18% growth in materials processing applications offset by declines in other applications. Year over year, the company has increased gross margins by about 54.2% last financial quarter, and finally, there is also 16% increase in overall bottom-line.
IPGP continues to steal market share from other companies in the same sector by relying on the accessibility and acceptance of its fiber laser technology for new applications. The laser and technology firm has also stated that it has plans to increase sales in metal cutting, welding, cladding, hardening, and cleaning applications.
One element to look out for, and it is growing exponentially, is 3D printing. IPGP maintained solid growth in 3D printing, glass cutting, plastic welding, and micro-processing. These are all indicative of long-term growth opportunities for IPGP.
Company Information
IGP Photonics Corporation (IPGP) is the developer and manufacturer of a range of fiber lasers, fiber amplifiers, and diode lasers that are used in numerous applications in diverse end markets. IPGP’s lines of lasers and amplifiers are used in materials processing, advanced communications, and medical applications. The company sells its products globally to original equipment manufacturers (OEMs), system integrators, and end users.
It designs and manufactures components used in its finished products, from semiconductor diodes to optical fibers and other components, finished fiber lasers and amplifiers. In July 2012, the company purchased 22.5% interest in its Russian-based subsidiary, NTO IRE-Polus. In September 2012, it acquired J.P. Sercel Associates Inc.
IPGP’s Bag of Tricks
IPGP has also announced in its most recent conference call that it plans on releasing new fiber laser product lines, including families of green, red, UV, and mid-infrared, as well as ultra-short-pulsed lasers. The company will push for these new family lines aggressively in the near future, and if successful, the firm will witness solid growth in 2015 and 2016.
IPGP is also establishing itself as a dominant force in its market, through an increase of 5% in the electrical efficiency of its high power lasers. The electrical efficiency is far better than diode lasers that are being pushed on to the market by IPGP’s rivals. The development of automotive brazing applications will also offer a growth benefit opportunity for IPGP when coupled with electrical efficiency.
Previous Financial Quarter
IPGP’s stock has been fluctuating quite a bit lately, and the financials can tell us a lot in regards to which direction this company may take. IPGP is a solid company in its own right, as we will see from examining key financials. Without further ado, here is some of IPGP’s key financial data, bearing in mind that net income, gross profit, and diluted net EPS are FY ended on 12/31/2013:
|
We can see that from these factors that IPGP is both profitable and still a reasonable value, especially when compared to the internet/mobile gaming industry. IPGP had a positive diluted net EPS for last year, and the Diluted Net EPS for the last financial quarter (6/30/2014) had improved nicely from previous quarters. The company is not showing any weaknesses in the short-term, and it is safe to say that it is not struggling for control of a larger share of the market.
IPGP does have a positive net income, but it may not be suitable for value investors when comparing the company’s forward P/E and PEG ratios with the industry’s forward P/E ratio and PEG ratio averages. Forward P/E ratio and perhaps most important for investors, its PEG ratio pales in comparison to the industry’s average. It is also noteworthy that IPGP’s stock has tumbled ever since its most recent earnings conference call.
Still, for the current quarter (9/2014), analysts have continually revised and upped their EPS estimates from $0.94/share 90 days ago to $0.98/share today. IPGP currently maintains a 0.00% Earnings ESP, an average EPS surprise rate of -1.44%,but a +6.98% EPS Surprise last quarter.
Conclusion
IPGP maintains a Zacks Rank #2 (Buy), and it is one of the few in its industry to maintain such a rank at this point in time. Investors are advised to keep an eye on this stock, as it can be volatile. Investors may want to use dips as entry points and hold stock until earnings, unless they are intent on keeping the stock for a longer period of time as IPGP could definitely be a strong performer over the long haul as well.
Comments
Log in or sign up to join the conversation.