IPG Photonics Corp (NASDAQ:IPGP) is among those small-cap companies that have stunned investors with their solid financial numbers and disciplined investment strategies. IPG Photonics stock price soared more than 136% in the last twelve months, rallying more than 267% in the last five years. The company’s stock performance experienced support from its financial numbers, which are exceeding compared to analysts expectations.
In the last three years, IPG Photonics generated sales growth of 15%, compared to the industry average of 10%. Moreover, its management has been turning sharp revenue growth into big profits, thanks to their efficient management strategies. Its earnings are increasing at a double-digit rate over the last three years.
The company’s vertically-integrated business model has been allowing its management to reduce costs, more rapidly scale production, and deliver innovative products. Its strategy of focusing on high performing products, including welding, cutting, and 3D printing applications are generating higher than expected results.
The company has recently announced Laser Depth Dynamics (LDD), which provides monitoring and control solutions for laser-based welding applications. LDD’s accessories and weld monitoring systems will substantially improve IPG’s laser welding solutions and beam delivery products portfolio.
Its business investment strategies are working. In the latest quarter, IPG Photonics’ high-power laser sales increased 60%, supported by growth in welding and cutting applications. On the other hand, its QCW laser sales surged almost 104%, driven by strong demand from consumer electronics. Consequently, the company generated consolidated sales growth of 48% in the latest quarter, while its net income grew 67% over the same period last year.
Furthermore, IGPG expects its earnings per share in the range of $1.80, relative to the consensus estimate of $1.57 per share. Its revenue growth is expected to increase by 37-39% in FY2017, compared to the last year period.
Growth investors have enjoyed a lot of share price appreciation in the last couple of years. However, its stock offers a room for further growth. Although the stock appears expensive trading at higher than industry valuations, its strong financial numbers and smart business expansion strategies would offer further support in the days to come. Therefore, holding IPG Photonics stock is a wise strategy.
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