IPGP - IPG Photonics Still Looking To Find Its Footing As Its Markets Shift And Cycle
2024-06-12 16:43:04 ET
Summary
- Once a fast-growing industrial tech darling, IPG Photonics shares dropped another 20% on cyclical and competitive issues, underperforming the broader industrial sector.
- IPG Photonics has seen intense price competition in once-core markets exacerbated by an overall slowdown in industrial capex spending and temporary overcapacity in growth markets like EV battery assembly.
- Industrial capex demand is likely bottoming out, with potential for recovery later in 2024 or in 2025 and IPGP is making structural changes that should strengthen the business.
- I'm tempted to remain bullish on IPGP as a contrarian/turnaround story where estimates could head higher, but it may be too early for such a call.
I was too early in thinking that the value I saw in IPG Photonics ( IPGP ) in January of 2023 on relatively modest growth assumptions was worth taking on the cyclical risk I saw in many short-cycle industrial markets, not to mention the ongoing shifts in IPGP’s competitive situation. Though the shares did head as much as 30% higher from that article , those gains vanished as cyclical and competitive issues bit down hard and drove weaker-than-expected financial results....
IPG Photonics Still Looking To Find Its Footing As Its Markets Shift And Cycle