What Happened:

Shares of fiber laser manufacturer IPG Photonics (NASDAQ:IPGP) fell 11.7% in the afternoon session after company reported second-quarter results that missed Wall Street's revenue and operating profit estimates. In addition, revenue and earnings per share (EPS) guidance for the next quarter came in below Consensus.

In speaking about the quarter, management stated that "second quarter book-to-bill (a leading indicator of revenue) was below one as increased economic uncertainty negatively impacted customer orders in our key geographies. In particular, general industrial demand in Europe and North America has weakened while industrial demand and EV investment remain soft in China."Overall, it was a weaker quarter for the company highlighting several challenges.

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What is the market telling us:

IPG Photonics's shares are somewhat volatile and over the last year have had 4 moves greater than 5%. But moves this big are very rare even for IPG Photonics and that is indicating to us that this news had a significant impact on the market's perception of the business. The previous big move was about two months ago, when the company gained 16.8% on the news that Raymond James analyst upgraded the stock's rating from Market Perform (Hold) to Outperform (Buy) and maintained a price target of $170. The price target was 27% above the market price when the upgrade was announced.

IPG Photonics is up 13.2% since the beginning of the year, but at $109.20 per share it is still trading 21.8% below its 52-week high of $139.71 from July 2023. Investors who bought $1,000 worth of IPG Photonics's shares 5 years ago would now be looking at an investment worth $659.58.

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