# IPG Photonics (IPGP.US)

Canonical: https://gigainvestors.com/s/IPGP

Analysis as of: 2026-10-16T07:29:23.571Z. Financial observations: FY2001–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $73.76 per share; close as of 2026-10-15.

Estimated value: low $37.35 per share, central $39.74 per share, high $42.93 per share. Buy at or below the central value $39.74 per share. Valuation as of 2026-10-16T07:29:23.571Z; scenarios are not confidence intervals.

Expected annual return: 5.5% at the stated quote. About 5.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 1

- Operating margin variation: 1.16×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.39×

- FY2018: 0.36×

- FY2019: 0.18×

- FY2020: 0.17×

- FY2021: 0.25×

- FY2022: 0.12×

- FY2023: 0.18×

- FY2024: -0.21×

- FY2025: 0.01×

- LTM to Jun 2026: 0.01×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 5.5pp below the typical margin (limit 4pp)

- ROIC, median of available years: 13.6%

- ROIC, second-lowest year: 0.5%

- Typical minus recent gross margin: 5.5 pp

- Typical gross margin (annual median): 43.5%

- Recent gross margin (lower of latest and 3-year median): 38.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 8.5%

- ROIC including acquisitions, ten-year median: 13.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 39.8%

- FY2018: 35.8%

- FY2019: 14.3%

- FY2020: 12.9%

- FY2021: 22.3%

- FY2022: 9.1%

- FY2023: 15.2%

- FY2024: -15.7%

- FY2025: 0.7%

- LTM to Jun 2026: 0.5%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.79×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $359M

- Net income, five-year total: $457M

- Return on incremental invested capital: -45.5%

- Working capital / revenue, annual change: 1.0 pp

- Working capital / revenue, change between three-year averages: 7.7 pp

- Working capital / revenue, final three-year average: 46.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.82×

- FY2023: 0.81×

- FY2024: 1.20×

- FY2025: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 35.8% vs 0.7%

- Per-share earnings: 4.85 to 0.73 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.2%

- Ordinary dilution, 5-year annual growth: -4.5%

- Market cap gain: -$2.2B

- Cumulative retained earnings: $1.6B

- Diluted shares, 10-year annual growth: -2.2%

- Diluted shares, 5-year annual growth: -4.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -21.1%

- Per-share value change: -$4.12

- Per-share value, starting three-year median: $4.85

- Per-share value, ending three-year median: $0.73

- Buybacks concentrated in cheaper years (correlation): -0.21

- Average buyback yield: 3.4%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $233M

- Cumulative net income, 10 years: $1.8B

- ROIC, first three-year median: 35.8%

- ROIC, last three-year median: 0.7%

Chart: Earnings per share; fiscal year observations.

- FY2016: $4.85

- FY2017: $6.36

- FY2018: $7.38

- FY2019: $3.35

- FY2020: $2.97

- FY2021: $5.16

- FY2022: $2.16

- FY2023: $4.63

- FY2024: -$4.09

- FY2025: $0.73

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -1.8%

- Receivables to sales index (DSRI): 1.03×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 57.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.42×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.06×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -1.8%

- FY2017: -2.4%

- FY2018: 0.4%

- FY2019: -5.2%

- FY2020: -4.3%

- FY2021: -3.5%

- FY2022: -3.7%

- FY2023: -2.9%

- FY2024: -18.8%

- FY2025: -1.8%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 57% since Dec 2021 · "IPG Photonics crashes after offering up weak Q2 outlook" (seekingalpha.com, May 2026) · sales +6.5%

Story as of 2026-10-16T09:58:57.808Z; price observation 2026-10-15.

Price needs cash profits to grow 13.5% a year for ten years

- 2026-02-26: IPG Photonics Receives Order From Lockheed Martin for CROSSBOW™ High-Energy Laser Systems ([finance.yahoo.com](https://finance.yahoo.com/news/ipg-photonics-receives-order-lockheed-140000242.html))

- 2026-05-05: IPG Photonics crashes after offering up weak Q2 outlook ([seekingalpha.com](https://seekingalpha.com/news/4585584-ipg-photonics-crashes-after-offering-up-weak-q2-outlook?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2025–2026

sales +6.5%; source https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm; observed 2026-02-23.

- FY2017: $1.4B 

- FY2018: $1.5B 

- FY2019: $1.3B 

- FY2020: $1.2B 

- FY2021: $1.5B 

- FY2022: $1.4B 

- FY2023: $1.3B 

- FY2024: $977M 

- FY2025: $1.0B 

- FY2026: $1.1B 

### Gross margin · FY2026

gross margin 38.4%; source https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm; observed 2026-02-23.

- FY2017: 56.6% 

- FY2018: 54.8% 

- FY2019: 46.1% 

- FY2020: 44.9% 

- FY2021: 47.7% 

- FY2022: 38.9% 

- FY2023: 42.1% 

- FY2024: 34.6% 

- FY2025: 38.0% 

- FY2026: 38.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductor equipment & materials; annual sales are USD 1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm (filed 2026-02-23); FY2025: revenue 1003777000; grossProfit 381463000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); IPGP.US: IPG Photonics Corporation develops, manufactures, and sells fiber lasers, fiber amplifiers, diode lasers, and laser-based systems used in materials processing, medical, and advanced applications. The company offers laser products, including hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; and high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers, as well as other versions. It also provides complementary products, such as optical fiber delivery cables, fiber couplers, beam switches, optical processing heads, process measuring and monitoring technologies, and in-line sensors and chillers. In addition, the company offers LightWELD, a handheld laser welding system; 2D compact flat sheet cutter systems; high precision laser systems for medical technology industry; multi axis Cartesian systems for fine welding, cutting, and drilling applications; laser and non-laser robotic welding and automation solutions; and related accessories for specific medical applications. The company sells and markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. It serves general manufacturing, automotive, consumer goods, medical devices, energy/renewable energy, micro electronics, original equipment manufacturers instrument manufacturing, scientific, as well as aerospace and defense, rail, and shipbuilding markets. IPG Photonics Corporation was founded in 1990 and is headquartered in Marlborough, Massachusetts.

### Why customers stay

Margins ranged from 34.6% to 42.1% during 2023–25; it earns 13.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: grossProfit / revenue = 42.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: grossProfit / revenue = 34.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm (filed 2026-02-23); FY2025: grossProfit / revenue = 38%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); 10-year return on capital observations [[2017,0.39832806266095566],[2018,0.35810758534210735],[2019,0.14330535258095178],[2020,0.1286036243265673],[2021,0.2228579392815162],[2022,0.09124193377413242],[2023,0.15170180633458882],[2024,-0.15743649024829737],[2025,0.0073205494689460625],[2026,0.004592691441706611]]; median 0.13595448845375954. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 38.4% of cash earnings on expansion; paid dividends in 5 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2016: growth capex 38147863.11685905; upkeep 88894136.88314095; owner earnings 223332863.11685905. Growth capex / owner earnings = 0.17081168702385802.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2017: growth capex 61967000; upkeep 64568000; owner earnings 347614000. Growth capex / owner earnings = 0.17826382136507735.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2018: growth capex 17877756.87677878; upkeep 142465243.12322122; owner earnings 341832756.8767788. Growth capex / owner earnings = 0.05229971826024624.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2019: growth capex 0; upkeep 133536000; owner earnings 142966000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2020: growth capex 0; upkeep 87696000; owner earnings 166430000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2021: growth capex 26778000; upkeep 96330000; owner earnings 278416000. Growth capex / owner earnings = 0.09617981725188207.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2022: growth capex 0; upkeep 110141000; owner earnings 90332000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: growth capex 0; upkeep 110483000; owner earnings 178016000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm (filed 2026-02-23); FY2025: growth capex 11944000; upkeep 66854000; owner earnings 31096000. Growth capex / owner earnings = 0.38410084898379215.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,7336000],[2020,33194000],[2021,16258000],[2022,5583000],[2023,236379999],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm (filed 2026-02-23); FY2025: cash repurchases 53132000 USD.

### Are managers owners

Insiders own 39% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); IPGP.US SharesStats.PercentInsiders = 38.984 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 13.5% yearly over ten years; actual decline was 16.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Ten-year compound average after fade. Initial solved rate 0.18260147203063049. Price 73.76; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 4.53242742433601 → FY2025 0.7291022269974531. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $97.01 per share

- 2016-11: $95.92 per share

- 2016-12: $98.71 per share

- 2017-01: $114.99 per share

- 2017-02: $118.30 per share

- 2017-03: $120.70 per share

- 2017-04: $126.32 per share

- 2017-05: $139.04 per share

- 2017-06: $145.10 per share

- 2017-07: $152.64 per share

- 2017-08: $175.79 per share

- 2017-09: $185.06 per share

- 2017-10: $212.91 per share

- 2017-11: $228.98 per share

- 2017-12: $214.13 per share

- 2018-01: $251.95 per share

- 2018-02: $245.64 per share

- 2018-03: $233.38 per share

- 2018-04: $213.03 per share

- 2018-05: $241.27 per share

- 2018-06: $220.63 per share

- 2018-07: $164.04 per share

- 2018-08: $175.48 per share

- 2018-09: $156.07 per share

- 2018-10: $133.55 per share

- 2018-11: $142.15 per share

- 2018-12: $113.29 per share

- 2019-01: $133.00 per share

- 2019-02: $155.03 per share

- 2019-03: $151.78 per share

- 2019-04: $174.73 per share

- 2019-05: $125.17 per share

- 2019-06: $154.25 per share

- 2019-07: $131.01 per share

- 2019-08: $123.73 per share

- 2019-09: $135.60 per share

- 2019-10: $134.28 per share

- 2019-11: $142.09 per share

- 2019-12: $144.92 per share

- 2020-01: $127.67 per share

- 2020-02: $127.64 per share

- 2020-03: $110.28 per share

- 2020-04: $129.33 per share

- 2020-05: $155.40 per share

- 2020-06: $160.39 per share

- 2020-07: $179.01 per share

- 2020-08: $161.73 per share

- 2020-09: $169.97 per share

- 2020-10: $185.96 per share

- 2020-11: $207.01 per share

- 2020-12: $223.79 per share

- 2021-01: $223.43 per share

- 2021-02: $227.35 per share

- 2021-03: $210.94 per share

- 2021-04: $217.11 per share

- 2021-05: $209.26 per share

- 2021-06: $210.77 per share

- 2021-07: $218.16 per share

- 2021-08: $170.68 per share

- 2021-09: $158.40 per share

- 2021-10: $159.01 per share

- 2021-11: $164.19 per share

- 2021-12: $172.14 per share

- 2022-01: $154.47 per share

- 2022-02: $130.35 per share

- 2022-03: $109.76 per share

- 2022-04: $94.48 per share

- 2022-05: $105.49 per share

- 2022-06: $94.13 per share

- 2022-07: $106.58 per share

- 2022-08: $90.59 per share

- 2022-09: $84.35 per share

- 2022-10: $85.66 per share

- 2022-11: $91.03 per share

- 2022-12: $94.67 per share

- 2023-01: $112.10 per share

- 2023-02: $123.24 per share

- 2023-03: $123.31 per share

- 2023-04: $114.98 per share

- 2023-05: $110.47 per share

- 2023-06: $135.82 per share

- 2023-07: $131.45 per share

- 2023-08: $108.36 per share

- 2023-09: $101.54 per share

- 2023-10: $85.90 per share

- 2023-11: $95.76 per share

- 2023-12: $108.54 per share

- 2024-01: $97.89 per share

- 2024-02: $86.35 per share

- 2024-03: $90.69 per share

- 2024-04: $83.98 per share

- 2024-05: $86.73 per share

- 2024-06: $84.39 per share

- 2024-07: $80.40 per share

- 2024-08: $68.37 per share

- 2024-09: $74.32 per share

- 2024-10: $80.96 per share

- 2024-11: $78.04 per share

- 2024-12: $72.72 per share

- 2025-01: $73.33 per share

- 2025-02: $58.19 per share

- 2025-03: $63.14 per share

- 2025-04: $59.89 per share

- 2025-05: $66.26 per share

- 2025-06: $68.65 per share

- 2025-07: $74.89 per share

- 2025-08: $81.82 per share

- 2025-09: $79.19 per share

- 2025-10: $85.12 per share

- 2025-11: $79.64 per share

- 2025-12: $71.60 per share

- 2026-01: $92.41 per share

- 2026-02: $131.57 per share

- 2026-03: $114.59 per share

- 2026-04: $118.92 per share

- 2026-05: $114.52 per share

- 2026-06: $117.32 per share

- 2026-07: $85.06 per share

- 2026-08: $76.08 per share

- 2026-09: $78.28 per share

- 2026-10: $73.76 per share

## Annual estimated value (USD per share)

- FY2016: low $78.00 per share, central $104.97 per share, high $120.68 per share

- FY2017: low $106.29 per share, central $143.31 per share, high $164.87 per share

- FY2018: low $114.13 per share, central $157.97 per share, high $182.43 per share

- FY2019: low $98.71 per share, central $131.10 per share, high $150.21 per share

- FY2020: low $79.58 per share, central $87.05 per share, high $96.99 per share

- FY2021: low $95.21 per share, central $120.64 per share, high $136.71 per share

- FY2022: low $65.09 per share, central $70.96 per share, high $78.76 per share

- FY2023: low $66.87 per share, central $74.48 per share, high $82.69 per share

- FY2024: low $53.85 per share, central $58.44 per share, high $64.56 per share

- FY2025: low $35.46 per share, central $37.71 per share, high $40.69 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1111928/000111192826000040/ipgp-20251231.htm); period 2025-12-31, filed 2026-02-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.