Intrinsic value of IPG Photonics - IPGP

Previous Close

$208.06

  Intrinsic Value

$393.79

stock screener

  Rating & Target

str. buy

+89%

Previous close

$208.06

 
Intrinsic value

$393.79

 
Up/down potential

+89%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of IPGP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.65
  45.80
  41.72
  38.05
  34.74
  31.77
  29.09
  26.68
  24.51
  22.56
  20.81
  19.23
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.62
  8.25
  7.93
  7.64
  7.37
  7.14
  6.92
Revenue, $m
  1,006
  1,467
  2,079
  2,870
  3,867
  5,095
  6,577
  8,332
  10,375
  12,715
  15,361
  18,315
  21,575
  25,140
  29,004
  33,162
  37,605
  42,329
  47,325
  52,590
  58,118
  63,906
  69,955
  76,263
  82,834
  89,672
  96,782
  104,172
  111,852
  119,833
  128,128
Variable operating expenses, $m
 
  908
  1,287
  1,775
  2,392
  3,151
  4,067
  5,151
  6,414
  7,860
  9,495
  11,319
  13,334
  15,537
  17,925
  20,494
  23,241
  26,160
  29,248
  32,501
  35,917
  39,495
  43,233
  47,132
  51,192
  55,418
  59,812
  64,380
  69,126
  74,058
  79,184
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  642
  908
  1,287
  1,775
  2,392
  3,151
  4,067
  5,151
  6,414
  7,860
  9,495
  11,319
  13,334
  15,537
  17,925
  20,494
  23,241
  26,160
  29,248
  32,501
  35,917
  39,495
  43,233
  47,132
  51,192
  55,418
  59,812
  64,380
  69,126
  74,058
  79,184
Operating income, $m
  364
  558
  792
  1,094
  1,475
  1,944
  2,510
  3,181
  3,961
  4,855
  5,866
  6,996
  8,241
  9,603
  11,079
  12,667
  14,365
  16,169
  18,078
  20,089
  22,200
  24,412
  26,722
  29,132
  31,642
  34,253
  36,969
  39,792
  42,726
  45,775
  48,943
EBITDA, $m
  415
  632
  896
  1,236
  1,666
  2,195
  2,834
  3,590
  4,470
  5,479
  6,619
  7,891
  9,296
  10,832
  12,497
  14,289
  16,203
  18,238
  20,391
  22,660
  25,042
  27,536
  30,142
  32,860
  35,691
  38,637
  41,701
  44,885
  48,195
  51,633
  55,207
Interest expense (income), $m
  1
  1
  5
  10
  16
  24
  34
  46
  60
  76
  95
  116
  139
  165
  194
  225
  258
  293
  331
  371
  413
  457
  503
  551
  601
  654
  708
  765
  824
  885
  949
Earnings before tax, $m
  367
  557
  787
  1,084
  1,459
  1,920
  2,476
  3,135
  3,901
  4,779
  5,771
  6,880
  8,102
  9,438
  10,885
  12,443
  14,107
  15,876
  17,747
  19,718
  21,788
  23,955
  26,219
  28,580
  31,040
  33,600
  36,261
  39,027
  41,902
  44,890
  47,994
Tax expense, $m
  106
  150
  212
  293
  394
  518
  669
  846
  1,053
  1,290
  1,558
  1,858
  2,188
  2,548
  2,939
  3,360
  3,809
  4,286
  4,792
  5,324
  5,883
  6,468
  7,079
  7,717
  8,381
  9,072
  9,790
  10,537
  11,314
  12,120
  12,958
Net income, $m
  261
  407
  575
  792
  1,065
  1,402
  1,808
  2,289
  2,848
  3,489
  4,213
  5,022
  5,915
  6,890
  7,946
  9,083
  10,298
  11,589
  12,955
  14,394
  15,905
  17,487
  19,140
  20,864
  22,659
  24,528
  26,471
  28,490
  30,589
  32,769
  35,036

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  831
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,790
  1,398
  1,982
  2,736
  3,686
  4,857
  6,270
  7,943
  9,890
  12,122
  14,644
  17,459
  20,567
  23,966
  27,649
  31,613
  35,849
  40,352
  45,115
  50,133
  55,403
  60,921
  66,687
  72,701
  78,965
  85,483
  92,261
  99,306
  106,627
  114,236
  122,143
Adjusted assets (=assets-cash), $m
  959
  1,398
  1,982
  2,736
  3,686
  4,857
  6,270
  7,943
  9,890
  12,122
  14,644
  17,459
  20,567
  23,966
  27,649
  31,613
  35,849
  40,352
  45,115
  50,133
  55,403
  60,921
  66,687
  72,701
  78,965
  85,483
  92,261
  99,306
  106,627
  114,236
  122,143
Revenue / Adjusted assets
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
  1.049
Average production assets, $m
  355
  516
  732
  1,010
  1,361
  1,793
  2,315
  2,933
  3,652
  4,476
  5,407
  6,447
  7,594
  8,849
  10,209
  11,673
  13,237
  14,900
  16,659
  18,512
  20,457
  22,495
  24,624
  26,845
  29,158
  31,564
  34,067
  36,669
  39,372
  42,181
  45,101
Working capital, $m
  1,143
  459
  651
  898
  1,210
  1,595
  2,059
  2,608
  3,247
  3,980
  4,808
  5,732
  6,753
  7,869
  9,078
  10,380
  11,770
  13,249
  14,813
  16,461
  18,191
  20,003
  21,896
  23,870
  25,927
  28,067
  30,293
  32,606
  35,010
  37,508
  40,104
Total debt, $m
  41
  143
  283
  463
  690
  970
  1,308
  1,707
  2,173
  2,706
  3,309
  3,982
  4,725
  5,537
  6,417
  7,364
  8,377
  9,453
  10,591
  11,791
  13,050
  14,369
  15,747
  17,185
  18,682
  20,239
  21,859
  23,543
  25,293
  27,111
  29,001
Total liabilities, $m
  232
  334
  474
  654
  881
  1,161
  1,499
  1,898
  2,364
  2,897
  3,500
  4,173
  4,916
  5,728
  6,608
  7,555
  8,568
  9,644
  10,782
  11,982
  13,241
  14,560
  15,938
  17,376
  18,873
  20,430
  22,050
  23,734
  25,484
  27,302
  29,192
Total equity, $m
  1,558
  1,064
  1,508
  2,082
  2,805
  3,696
  4,771
  6,045
  7,526
  9,224
  11,144
  13,286
  15,652
  18,238
  21,041
  24,057
  27,281
  30,708
  34,332
  38,151
  42,162
  46,361
  50,749
  55,325
  60,092
  65,053
  70,211
  75,572
  81,143
  86,933
  92,951
Total liabilities and equity, $m
  1,790
  1,398
  1,982
  2,736
  3,686
  4,857
  6,270
  7,943
  9,890
  12,121
  14,644
  17,459
  20,568
  23,966
  27,649
  31,612
  35,849
  40,352
  45,114
  50,133
  55,403
  60,921
  66,687
  72,701
  78,965
  85,483
  92,261
  99,306
  106,627
  114,235
  122,143
Debt-to-equity ratio
  0.026
  0.130
  0.190
  0.220
  0.250
  0.260
  0.270
  0.280
  0.290
  0.290
  0.300
  0.300
  0.300
  0.300
  0.300
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
Adjusted equity ratio
  0.758
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  261
  407
  575
  792
  1,065
  1,402
  1,808
  2,289
  2,848
  3,489
  4,213
  5,022
  5,915
  6,890
  7,946
  9,083
  10,298
  11,589
  12,955
  14,394
  15,905
  17,487
  19,140
  20,864
  22,659
  24,528
  26,471
  28,490
  30,589
  32,769
  35,036
Depreciation, amort., depletion, $m
  51
  74
  104
  142
  191
  251
  324
  409
  509
  624
  753
  895
  1,055
  1,229
  1,418
  1,621
  1,838
  2,069
  2,314
  2,571
  2,841
  3,124
  3,420
  3,728
  4,050
  4,384
  4,732
  5,093
  5,468
  5,859
  6,264
Funds from operations, $m
  212
  480
  678
  934
  1,256
  1,653
  2,131
  2,698
  3,357
  4,112
  4,966
  5,918
  6,969
  8,119
  9,364
  10,704
  12,137
  13,659
  15,269
  16,965
  18,746
  20,611
  22,560
  24,592
  26,709
  28,912
  31,202
  33,583
  36,057
  38,628
  41,300
Change in working capital, $m
  -80
  144
  192
  248
  312
  384
  464
  549
  639
  733
  828
  924
  1,021
  1,116
  1,210
  1,301
  1,391
  1,478
  1,564
  1,648
  1,730
  1,812
  1,893
  1,975
  2,057
  2,140
  2,225
  2,313
  2,404
  2,498
  2,596
Cash from operations, $m
  292
  336
  487
  686
  944
  1,268
  1,667
  2,149
  2,718
  3,380
  4,138
  4,993
  5,949
  7,003
  8,155
  9,403
  10,746
  12,180
  13,705
  15,317
  17,016
  18,799
  20,667
  22,618
  24,652
  26,772
  28,977
  31,270
  33,653
  36,130
  38,704
Maintenance CAPEX, $m
  0
  -49
  -72
  -102
  -140
  -189
  -249
  -322
  -407
  -507
  -622
  -751
  -895
  -1,055
  -1,229
  -1,418
  -1,621
  -1,838
  -2,069
  -2,314
  -2,571
  -2,841
  -3,124
  -3,420
  -3,728
  -4,050
  -4,384
  -4,732
  -5,093
  -5,468
  -5,859
New CAPEX, $m
  -127
  -162
  -215
  -278
  -351
  -432
  -522
  -618
  -719
  -824
  -931
  -1,040
  -1,148
  -1,255
  -1,360
  -1,463
  -1,564
  -1,663
  -1,759
  -1,853
  -1,946
  -2,038
  -2,129
  -2,221
  -2,313
  -2,407
  -2,503
  -2,601
  -2,703
  -2,809
  -2,920
Cash from investing activities, $m
  -274
  -211
  -287
  -380
  -491
  -621
  -771
  -940
  -1,126
  -1,331
  -1,553
  -1,791
  -2,043
  -2,310
  -2,589
  -2,881
  -3,185
  -3,501
  -3,828
  -4,167
  -4,517
  -4,879
  -5,253
  -5,641
  -6,041
  -6,457
  -6,887
  -7,333
  -7,796
  -8,277
  -8,779
Free cash flow, $m
  18
  125
  200
  306
  453
  647
  897
  1,209
  1,591
  2,049
  2,585
  3,203
  3,906
  4,693
  5,566
  6,522
  7,560
  8,679
  9,877
  11,151
  12,499
  13,920
  15,413
  16,977
  18,611
  20,315
  22,090
  23,937
  25,857
  27,852
  29,926
Issuance/(repayment) of debt, $m
  21
  105
  139
  180
  227
  280
  338
  400
  465
  533
  603
  673
  743
  812
  880
  947
  1,012
  1,076
  1,138
  1,199
  1,259
  1,319
  1,378
  1,437
  1,497
  1,558
  1,620
  1,684
  1,750
  1,818
  1,890
Issuance/(repurchase) of shares, $m
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  33
  105
  139
  180
  227
  280
  338
  400
  465
  533
  603
  673
  743
  812
  880
  947
  1,012
  1,076
  1,138
  1,199
  1,259
  1,319
  1,378
  1,437
  1,497
  1,558
  1,620
  1,684
  1,750
  1,818
  1,890
Total cash flow (excl. dividends), $m
  41
  230
  339
  486
  680
  927
  1,234
  1,609
  2,057
  2,582
  3,188
  3,876
  4,649
  5,505
  6,446
  7,469
  8,573
  9,755
  11,015
  12,350
  13,759
  15,239
  16,791
  18,414
  20,108
  21,873
  23,710
  25,621
  27,607
  29,671
  31,815
Retained Cash Flow (-), $m
  -298
  -334
  -444
  -574
  -723
  -891
  -1,075
  -1,273
  -1,482
  -1,698
  -1,919
  -2,143
  -2,365
  -2,586
  -2,803
  -3,016
  -3,224
  -3,427
  -3,625
  -3,819
  -4,010
  -4,199
  -4,388
  -4,576
  -4,767
  -4,960
  -5,158
  -5,361
  -5,572
  -5,790
  -6,017
Prev. year cash balance distribution, $m
 
  828
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  724
  -105
  -87
  -43
  36
  159
  336
  575
  884
  1,268
  1,733
  2,283
  2,919
  3,643
  4,453
  5,349
  6,329
  7,390
  8,531
  9,748
  11,040
  12,404
  13,838
  15,341
  16,913
  18,552
  20,259
  22,035
  23,881
  25,798
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  694
  -96
  -76
  -36
  28
  115
  227
  359
  508
  665
  823
  974
  1,110
  1,223
  1,307
  1,359
  1,377
  1,361
  1,314
  1,239
  1,142
  1,029
  907
  781
  658
  541
  435
  341
  261
  194
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

IPG Photonics Corporation is a developer and manufacturer of a line of fiber lasers, fiber amplifiers, diode lasers, laser systems and optical accessories that are used for various applications. The Company offers a line of lasers and amplifiers, which are used in materials processing, communications and medical applications. The Company sells its products globally to original equipment manufacturers (OEMs), system integrators and end users. The Company's manufacturing facilities are located in the United States, Germany and Russia. The Company offers laser-based systems for certain markets and applications. Its products are designed to be used as general-purpose energy or light sources. Its product line includes High-Power Ytterbium CW (1,000-100,000 Watts), Mid-Power Ytterbium CW (100-999 Watts), Pulsed Ytterbium (0.1 to 200 Watts), Pulsed and CW, Quasi-CW Ytterbium (100-4,500 Watts), Erbium Amplifiers and Transceivers.

FINANCIAL RATIOS  of  IPG Photonics (IPGP)

Valuation Ratios
P/E Ratio 42.4
Price to Sales 11
Price to Book 7.1
Price to Tangible Book
Price to Cash Flow 37.9
Price to Free Cash Flow 67.1
Growth Rates
Sales Growth Rate 11.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 81.4%
Cap. Spend. - 3 Yr. Gr. Rate 12.3%
Financial Strength
Quick Ratio 277
Current Ratio 0
LT Debt to Equity 2.4%
Total Debt to Equity 2.6%
Interest Coverage 368
Management Effectiveness
Return On Assets 16.1%
Ret/ On Assets - 3 Yr. Avg. 17.3%
Return On Total Capital 18.1%
Ret/ On T. Cap. - 3 Yr. Avg. 19.4%
Return On Equity 18.5%
Return On Equity - 3 Yr. Avg. 19.9%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 54.9%
Gross Margin - 3 Yr. Avg. 54.5%
EBITDA Margin 41.7%
EBITDA Margin - 3 Yr. Avg. 42%
Operating Margin 36.2%
Oper. Margin - 3 Yr. Avg. 37%
Pre-Tax Margin 36.5%
Pre-Tax Margin - 3 Yr. Avg. 37.1%
Net Profit Margin 25.9%
Net Profit Margin - 3 Yr. Avg. 26.3%
Effective Tax Rate 28.9%
Eff/ Tax Rate - 3 Yr. Avg. 29.2%
Payout Ratio 0%

IPGP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IPGP stock intrinsic value calculation we used $1006 million for the last fiscal year's total revenue generated by IPG Photonics. The default revenue input number comes from 2016 income statement of IPG Photonics. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IPGP stock valuation model: a) initial revenue growth rate of 45.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for IPGP is calculated based on our internal credit rating of IPG Photonics, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of IPG Photonics.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IPGP stock the variable cost ratio is equal to 62%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for IPGP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for IPG Photonics.

Corporate tax rate of 27% is the nominal tax rate for IPG Photonics. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IPGP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IPGP are equal to 35.2%.

Life of production assets of 7.2 years is the average useful life of capital assets used in IPG Photonics operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IPGP is equal to 31.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1558 million for IPG Photonics - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 53.814 million for IPG Photonics is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of IPG Photonics at the current share price and the inputted number of shares is $11.2 billion.

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COMPANY NEWS

▶ Why IPG Photonics Stock Dropped Today   [Dec-04-17 05:02PM  Motley Fool]
▶ Dow Rallies; 3 Reasons Why The Tech-Stock Run Isn't Over   [Nov-29-17 03:45PM  Investor's Business Daily]
▶ 5 Stocks Hitting New Highs to Buy Right Now   [Nov-14-17 12:54PM  Zacks]
▶ IPG tops Street 3Q forecasts   [08:08AM  Associated Press]
▶ 3 Stocks Building the World of Tomorrow   [Oct-11-17 06:32AM  Motley Fool]
▶ 3 Companies That Are Changing How Business Gets Done   [Oct-09-17 09:00PM  Motley Fool]
▶ IPG beats Street 2Q forecasts   [Aug-01-17 09:31PM  Associated Press]
▶ 3 Stocks With Shopify-Like Return Potential   [Jul-16-17 08:33AM  Motley Fool]
▶ 3 Tech Stocks for July   [Jul-12-17 08:30AM  Motley Fool]
▶ ETFs with exposure to IPG Photonics Corp. : July 10, 2017   [Jul-10-17 02:42PM  Capital Cube]
▶ New Strong Buy Stocks for June 26th   [Jun-26-17 07:55AM  Zacks]
▶ ETFs with exposure to IPG Photonics Corp. : June 13, 2017   [Jun-13-17 12:38PM  Capital Cube]
▶ Why IPG Photonics Gained 10.1% in May   [Jun-02-17 09:00AM  Motley Fool]
▶ ETFs with exposure to IPG Photonics Corp. : June 1, 2017   [Jun-01-17 01:53PM  Capital Cube]
▶ ETFs with exposure to IPG Photonics Corp. : May 18, 2017   [May-18-17 01:48PM  Capital Cube]
▶ Stocks Cut Losses, But These 4 Leaders Just Fine; Can Snap Recover In 2017?   [May-11-17 01:00PM  Investor's Business Daily]
▶ IPG Photonics Stays on Target With Red-Hot Growth   [May-02-17 05:58PM  Motley Fool]
▶ IPG beats Street 1Q forecasts   [08:13AM  Associated Press]
▶ Apple, Opticals, Drug Giants Headline Tuesday's Investing Action Plan   [May-01-17 04:52PM  Investor's Business Daily]
▶ Breakout Watch: 24 Mutual Funds With A+ Ratings Own This Stock   [Apr-04-17 04:38PM  Investor's Business Daily]
▶ IPG Photonics Stock Shoots Up Like Laser After Earnings, Outlook   [Feb-15-17 04:33PM  Investor's Business Daily]
▶ IPG tops Street 4Q forecasts   [08:16AM  Associated Press]
Financial statements of IPGP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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