Once upon a time, fiber laser manufacturer IPG Photonics (NASDAQ: IPGP) saw nothing but blue skies ahead. The global economy was booming for years, driving a strong demand for laser-based manufacturing systems. The upcoming debut of 5G wireless systems promised to unlock equally fantastic growth in communication systems lasers.
Heading into the second-quarter earnings report of 2018, sales were expected to increase more than 10% year over year alongside 15% higher earnings. IPG's stock had quadrupled in five years, returning 1,230% in 10 years.
However, IPG missed analyst expectations across the board in that game-changing report, and management's guidance set a low bar for the upcoming quarter. The company missed those below-expectations targets, as well, and IPG has continued to fall short of both management's guidance and analysts' estimates ever since. The stock is trading 40% below the price it held just before that gruesome second-quarter report, two summers ago.