IPG Photonics Hit Hard By Ongoing Share Loss And Global Tensions

Stephen Simpson profile picture
Stephen Simpson


  • IPG Photonics posted disappointing results for Q4'21 with pronounced weakness in its Chinese high-power laser business and guided to a mid-single-digit growth rate and a "reset" for FY'22.
  • Competitive inroads from Chinese fiber laser companies have been an issue for some time, and management will have to work to build new high-value growth markets outside of China.
  • IPG has stayed at the forefront of fiber laser technology for years, but finding new, large growth markets has proven more challenging and inconsistent.
  • Geopolitical turbulence is a credible risk, with IPG having a substantial physical presence (manufacturing, R&D, and management) in Russia.
  • Mid-single-digit revenue growth, high single-digit FCF growth, and mid-to-high 20%s operating margins can support a higher share price, but this is a contrarian call.

The fiber laser cutting machine cutting machine cut the metal plate.

Phuchit/iStock via Getty Images

Going positive on IPG Photonics (NASDAQ:IPGP) back in August has turned out to be a bad call. Not only has geopolitical tension with Russia created worries about how IPG Photonics could be impacted by potential

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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