Why IPG Photonics Shares Shorted Out
May 1st 2013 1:48PM
Updated May 1st 2013 2:35PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of IPG Photonics have lost 10% of their value today after the company disappointed Wall Street with weak earnings.
So what: IPG's first-quarter report showed revenue of $141.9 million and earnings of $0.67 per share. Although both showed respectable year-over-year growth, analysts were looking for $150.2 million on the top line and $0.70 in EPS. IPG's guidance for the second quarter now clocks in at $155 million to $165 million against a $162.1 million consensus, with EPS guidance ranging from $0.72 to $0.82, against Wall Street's $0.78 target.
Now what: This drop might not be such a bad thing. At a 20.6 P/E, IPG is valued like many other slow-growth companies when it's continuing to post double-digit growth in its fundamentals. Both top- and bottom-line guidance show more opportunity ahead, and the company's core materials processing business is up 29% year over year. I would keep my eye on this stock after the drop today. Just because analysts got a little overly optimistic doesn't mean that the company's fundamentals aren't strong.
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The article Why IPG Photonics Shares Shorted Out originally appeared on Fool.com.Motley Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool recommends IPG Photonics. The Motley Fool owns shares of IPG Photonics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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