Financial Survey: IPG Photonics (IPGP) & Electro Scientific Industries (ESIO)

IPG Photonics (NASDAQ: IPGP) and Electro Scientific Industries (NASDAQ:ESIO) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares IPG Photonics and Electro Scientific Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IPG Photonics 27.85% 21.17% 18.56%
Electro Scientific Industries -9.00% -13.50% -8.93%

Risk and Volatility

IPG Photonics has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500. Comparatively, Electro Scientific Industries has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares IPG Photonics and Electro Scientific Industries’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IPG Photonics $1.01 billion 12.62 $260.75 million $6.80 34.83
Electro Scientific Industries $161.02 million 4.17 -$37.40 million ($0.63) -31.83

IPG Photonics has higher revenue and earnings than Electro Scientific Industries. Electro Scientific Industries is trading at a lower price-to-earnings ratio than IPG Photonics, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

56.4% of IPG Photonics shares are owned by institutional investors. Comparatively, 75.3% of Electro Scientific Industries shares are owned by institutional investors. 33.8% of IPG Photonics shares are owned by company insiders. Comparatively, 6.2% of Electro Scientific Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for IPG Photonics and Electro Scientific Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IPG Photonics 0 3 6 0 2.67
Electro Scientific Industries 0 0 3 0 3.00

IPG Photonics currently has a consensus target price of $172.88, suggesting a potential downside of 27.00%. Electro Scientific Industries has a consensus target price of $26.33, suggesting a potential upside of 31.34%. Given Electro Scientific Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Electro Scientific Industries is more favorable than IPG Photonics.

Summary

IPG Photonics beats Electro Scientific Industries on 11 of the 14 factors compared between the two stocks.

IPG Photonics Company Profile

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.

Electro Scientific Industries Company Profile

Electro Scientific Industries, Inc. and its subsidiaries supply laser-based manufacturing solutions for industries reliant on microtechnologies. The Company operates through two segments: Component Processing and Micromachining. The Component Processing segment includes interconnect products, semiconductor products and component products. The interconnect, semiconductor and component products are sold to manufacturers of electronic components and are used to drill, cut, trim, ablate and test and mark features for the functionality of the component. The Micromachining segment includes products that are sold to manufacturers of end devices across various industries and are used to drill, cut or mark features on a range of materials, generally on the casing or external surface of the end device. Its integrated solutions allow industrial designers and process engineers to control the power of laser light to transform materials. It has operations in Asia, Europe and North America.

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