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IPG Photonics Corp. (NASDAQ:IPGP), a $2.29 billion market cap company currently trading near its 52-week low, announced on Monday an amendment to its consulting agreement with Dr. Alexander Ovtchinnikov, the company’s former Senior Vice President and Chief Technology Officer. The amendment extends Dr. Ovtchinnikov’s consulting services through December 31, 2025, with a monthly fee of $10,000. According to InvestingPro data, the company has experienced challenging market conditions, with shares down 30% over the past six months.
The original consulting agreement, dated August 15, 2024, was modified to prolong Dr. Ovtchinnikov’s tenure, ensuring his expertise remains available to the Massachusetts-based company, which specializes in semiconductors and related devices.
This development, disclosed in a recent 8-K filing with the Securities and Exchange Commission, underscores the value IPG Photonics places on Dr. Ovtchinnikov’s contributions to the organization. The company, headquartered in Marlborough, MA, is known for its innovations in the field of high-performance fiber lasers and amplifiers.
The extension of the consulting agreement is a strategic move by IPG Photonics as it continues to leverage Dr. Ovtchinnikov’s extensive knowledge in technology development. The detailed terms of the amendment are outlined in Exhibit 10.1 of the 8-K filing, which is incorporated by reference.
This contract extension with Dr. Ovtchinnikov may indicate IPG Photonics’ ongoing commitment to technological advancement and competitive edge in the semiconductor industry. The information provided in this article is based on the company’s statement in the SEC filing.
In other recent news, IPG Photonics reported a 22% year-over-year decline in fourth-quarter 2024 revenue, amounting to $234 million, with the midpoint of its first-quarter 2025 revenue forecast at $225 million, slightly below consensus estimates. Citi analysts maintained a Sell rating on IPG Photonics, setting a price target of $62, following the company’s earnings report. Despite the revenue drop, IPG Photonics’ gross profit margin exceeded expectations, reaching 38.6% due to reduced product costs and other factors. However, the company’s earnings per share (EPS) fell significantly, dropping by 80% from the previous year, primarily due to unusual tax items.
Looking ahead, IPG Photonics expects first-quarter 2025 EPS to decline by 90% to 33% year-over-year, with anticipated revenues between $210 and $240 million. Stifel analysts cut their price target for IPG Photonics to $85 but upheld a Buy rating, citing the company’s strong technology portfolio and balance sheet as competitive advantages. Stifel also highlighted IPG Photonics’ strategic focus on research and development to target new market opportunities. Both analyst firms noted that the anticipated revenue recovery might not materialize until 2026, as the company navigates ongoing macroeconomic challenges and competition.
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