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IPG Photonics Corporation (NASDAQ:IPGP), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$81.31 and falling to the lows of US$57.86. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether IPG Photonics' current trading price of US$58.27 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at IPG Photonics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for IPG Photonics
What Is IPG Photonics Worth?
Great news for investors – IPG Photonics is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $83.16, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that IPG Photonics’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of IPG Photonics look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. IPG Photonics' revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since IPGP is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on IPGP for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IPGP. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.