Fiber laser manufacturer IPG Photonics (NASDAQ:IPGP) will be reporting results tomorrow before the bell. Here's what to look for.

IPG Photonics beat analysts' revenue expectations by 4.3% last quarter, reporting revenues of $298.9 million, down 10.4% year on year. It was a very strong quarter for the company, with a significant improvement in its inventory levels.

Is IPG Photonics a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting IPG Photonics's revenue to decline 26.9% year on year to $253.7 million, a further deceleration from the 6.2% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.50 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they are expecting the business to stay the course heading into earnings. IPG Photonics has missed Wall Street's revenue estimates three times over the last two years.

Looking at IPG Photonics's peers in the semiconductor manufacturing segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Teradyne's revenues decreased 2.9% year on year, beating analysts' expectations by 5.2%, and Lam Research reported a revenue decline of 2%, topping Wall Street's consensus estimates by 1.7%. Teradyne traded up 7.9% following the results while Lam Research was flat on the results.

Read our full analysis of Teradyne's results here and Lam Research's results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the semiconductor manufacturing stocks have fared somewhat better, they have not been spared, with share price declining 2.9% over the last month. IPG Photonics is down 2% during the same time and is heading into earnings with an average analyst price target of $108.4 (compared to share price of $88.4).

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