Technology

Report by Behind the Numbers

BTN remains sceptical of IPGP’s apparent earnings resilience, arguing recent “beats” have been flattered by unusually wide guidance ranges and accounting tailwinds. The company missed 1Q26 consensus EPS by 2c, but prior quarters looked stronger because management guided to very broad EPS ranges, including 5-35c in both 3Q25 and 4Q25, despite EPS already running around 30-35c in the preceding three quarters. BTN also questions valuation: at c.72x forward adjusted EPS, trailing four-quarter adjusted EPS of $1.40 includes 53c of interest income; excluding this, the multiple rises to c.135x. Earnings quality concerns include several quarters of declining charges against gross profit; prior warranty-accrual reductions that may now reverse as warranty expense rises; extended machinery useful lives; fully depreciated assets supporting margins; and reduced bad-debt reserves despite 74% non-US sales.

Report by MYST Advisors

MYST hosted 23 Formal Events in 2021 which yielded 73 short ideas - 83% of these calls yielded positive alpha with ~21% average alpha over a 3-month period (12-month figs: 77% generated positive alpha with 21% avg. alpha). Ideas that remain compelling include:

United Parcel Service (UPS) - Multi-yr headwinds from increased competition, wage inflation and airfreight rate normalisation.
Elanco Animal Health (ELAN) - Questionable M&A strategy, bloated balance sheet and SEC probe to pressure results.
IPG Photonics (IPGP) - Anticipate precipitous ASP declines due to low-cost Chinese competitors.