IPG Photonics IPGP is scheduled to release first-quarter 2025 results on May 6.

IPGP expects first-quarter 2025 non-GAAP earnings per share between 5 cents and 35 cents. Revenues are anticipated between $210 million and $240 million.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 21 cents per share, revised downward by a couple of cents over the past 30 days, indicating a 59.62% year-over-year decline.

The Zacks Consensus Estimate for revenues is pegged at $221.18 million, indicating a year-over-year decrease of 12.23%.

IPGP has a mixed earnings surprise history. It missed the Zacks Consensus Estimate in two of the trailing four quarters and beat the other two, delivering an average earnings surprise of 15.97%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Consider for IPG Photonics

IPG Photonics is suffering from lower demand for welding, cutting and marking applications, which has hurt its materials processing business, primarily due to economic uncertainty and an increasingly competitive environment in China. This downturn is likely to have further pressured overall financial performance, contributing to weaker growth in the to-be-reported quarter.

The increasingly competitive environment, particularly in cutting applications, has been a headwind. In fourth-quarter 2024, revenues from China declined 22% year over year due to lower demand in general industrial markets, continued competitive pressure in cutting applications and reduced investments in EV battery production. IPGP is expected to have suffered from reduced market share and weakened revenue performance in these regions.

Continued economic uncertainty in Europe is impacting industrial demand and capital investments, which does not bode well for IPG Photonics. It has witnessed sluggish demand from cutting OEM customers who have been managing inventory and reducing purchases. Weak demand is anticipated to have continued in the quarter under review.

However, IPG Photonics’ strategic expansion into new end-markets, including 3D printing, micro-materials processing, electric vehicles (EV), and medical devices, is expected to have provided some offsetting benefits. Growing traction in these areas is expected to have supported revenue diversification, where the company is likely to see continued expansion in these markets.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the exact case here.

IPGP has an Earnings ESP of -33.33% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model indicates that they possess the right combination of factors to exceed earnings expectations in their upcoming releases:

StoneCo STNE has an Earnings ESP of +13.79% and sports a Zacks Rank of #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo shares have appreciated 76.4% year to date. STNE is set to report its first-quarter 2025 results on May 8.

Affirm AFRM presently has an Earnings ESP of +63.27% and sports a Zacks Rank #1.

Affirm shares have plunged 17.1% year to date. AFRM is scheduled to report its fourth-quarter fiscal 2025 results on May 8.

Baidu BIDU currently has an Earnings ESP of +8.67% and a Zacks Rank #3.

Baidu shares are up 5.9% year to date. BIDU is slated to report its first-quarter 2025 results on May 21.

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This article originally published on Zacks Investment Research (zacks.com).

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