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IPG PhotonicsIPGP +4.06%72 Operating Margin % is 7.59% as of Jun. 2026, which is 63% below its 10-year median of 20.71. GuruFocus rates IPGP with a GF Score™ of 72/100 and a GF Value™ of $86.25 (Fairly Valued). The stock has 5 warning signs investors should review. Among 1,022 Semiconductors companies, IPG Photonics ranks worse than 55.68% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
IPG Photonics Operating Margin % Related Terms
IPG Photonics Operating Margin % Historical Data
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The historical data trend for IPG Photonics's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
IPGP vs ACLS, UCTT, VECO: Operating Margin % Comparison
For the Semiconductor Equipment & Materials subindustry, IPG Photonics's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
IPG Photonics Operating Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, IPG Photonics's Operating Margin % distribution charts can be found below:
* The bar in red indicates where IPG Photonics's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
IPG Photonics's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
IPG Photonics (IPGP) has a Operating Margin % of 7.59% as of Jun. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on IPG Photonics and its competitors. This is 63% below median its historical median of 20.71. Over the past decade, IPG Photonics' Operating Margin % has ranged from 1.48 to 40.14. According to the industry distribution chart, IPG Photonics ranks #569 out of 1022 companies in the Semiconductors industry, placing it in the top 55.7%.
Is IPG Photonics' Operating Margin % too high?
IPG Photonics' current Operating Margin % of 7.59% is 63% below median its 10-year median of 20.71. Over the past 10 years, this metric has ranged from a low of 1.48 to a high of 40.14. The Semiconductors industry median Operating Margin % is 5.59. IPG Photonics' value of 7.59% is 35.8% above this industry median. Based on the distribution chart, IPG Photonics ranks #569 out of 1022 companies in the Semiconductors industry, which is below the industry midpoint. Overall, IPG Photonics has a GF Score™ of 72/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does IPG Photonics' Operating Margin % compare to ACLS and UCTT?
According to the Semiconductors industry distribution chart, IPG Photonics ranks #569 out of 1022 companies for Operating Margin %. This places IPG Photonics in the lower half of its industry. The industry median Operating Margin % is 5.59. IPG Photonics' value of 7.59% is 35.8% above this benchmark. Historically, IPG Photonics' own Operating Margin % has ranged from 1.48 to 40.14 over the past decade. While the company's 10-year median is 20.71 vs. the industry median of 5.59, IPG Photonics has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Semiconductors company?
The median Operating Margin % among Semiconductors companies is 5.59, based on 1,022 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. IPG Photonics's current Operating Margin % of 7.59% is 35.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on IPG Photonics and its competitors. For the Semiconductors industry, the median Operating Margin % is 5.59 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. IPG Photonics's current Operating Margin % is 7.59%, which is 63% below median its own 10-year median of 20.71. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is IPG Photonics stock overvalued right now?
Based on GuruFocus' analysis, IPG Photonics (IPGP) is currently considered Fairly Valued. The stock's GF Value™ is $86.25, compared to a current price of $90.23 — trading 4.6% above its estimated fair value. The current Operating Margin % is 7.59%, which is 63% below median its 10-year median of 20.71 and 35.8% above the Semiconductors industry median of 5.59. IPG Photonics' overall GF Score™ is 72/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For IPG Photonics (IPGP), the current Operating Margin % is 7.59% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is IPG Photonics (IPGP) Overvalued in 2026?
Based on GuruFocus' analysis, IPG Photonics stock appears to be overvalued.
The current stock price of $90.23 is trading 4.6% above its estimated GF Value™ of $86.25.
GuruFocus considers IPG Photonics to be Fairly Valued.
Key valuation signals for IPGP:
Operating Margin %: 7.59% (63% below median its 10-year median of 20.71)
GF Value™: $86.25 vs. price of $90.23 (4.6% above fair value)
Industry Position: 35.8% above the Semiconductors median (#569 of 1022)
No single metric tells the full story. See the IPGP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
IPG Photonics Corp is a vertically integrated developer and manufacturer of high-performance fiber lasers, laser and non-laser systems, fiber amplifiers, diode lasers, and related optical components. Its products are used in diverse applications in the manufacturing, automotive, industrial, aerospace, semiconductor, and consumer end markets. The company sells its products globally to original equipment manufacturers (OEMs), system integrators, and end users. Additionally, it manufactures complementary products used with its lasers, including optical delivery cables, fiber couplers, beam switches, optical processing heads, in-line sensors, and chillers. Geographically, the company generates maximum revenue from North America, followed by China, Japan, Germany, and other markets.
72GF Score
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