IPGP
IPG Photonics Corporation
$76.53
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 72.8% above fair value
You pay
$76.53
Bear
$33.22
Fair
$44.29
Bull
$55.36
Bear
$33.22
-56.6%
$2.77 × 12x
Fair
$44.29
-42.1%
$2.77 × 16x
Bull
$55.36
-27.7%
$2.77 × 20x
Adjust Assumptions
16.0x
2.77$
Key Value Driver
Through-cycle normalized EPS ($2.77)
Implied Market Multiple
27.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$135.50
Divergence from AlphaVal
67%
Summary
Using 7-year normalized EPS of $2.77 at a 16x cycle multiple, the base-case value is $44.29 per share. P/TBV cross-check: 1.6x.
Warnings
Wall Street's average price target is $135.50 (from 27 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.
This stock is 51% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing