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Faro Technologies (FARO)
NASDAQ:FARO
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Faro Technologies
(NASDAQ:FARO)
61Neutral
Positive Factors
Earnings
FARO got off to an encouraging start in 2025, delivering Q1 revenues above the midpoint of the range with strong earnings upside on better gross margins and op-ex control.
Operational Strategy
FARO's new approach to partnerships could be a solid tailwind, as management noted it believes it can reach a significantly higher number of customers through a more aggressive partnership strategy.
Partnerships
FARO is taking important steps to drive growth, including securing two new OEM/distribution agreements and new product introductions.
Negative Factors
Macro Environment
FARO’s Q2 guide for revenues -- down 4% to +6% year-over-year vs. consensus +1% -- appears to adequately reflect the challenging macro, with particular conservatism built into hardware sales in Q2.
Revenue Guidance
Q2 revenue guidance was in line with consensus at the midpoint of the range, with a much stronger than expected EPS guide.
Faro Technologies (FARO) vs. S&P 500 (SPY)
Market Cap
$592.36M
Dividend YieldN/A
Average Volume (3M)278.04K
Price to Earnings (P/E)―
Beta (1Y)2.57
Revenue Growth-4.76%
EPS Growth97.93%
CountryUS
Employees1,181
SectorTechnology
Sector Strength67
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.33
Shares Outstanding19,226,240
10 Day Avg. Volume336,690
30 Day Avg. Volume278,035
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.89
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.82
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.50Price Target Upside34.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Faro Technologies Business Overview & Revenue Model
Company DescriptionFARO Technologies, Inc. designs, develops, manufactures, markets, and supports software driven three-dimensional measurement, imaging, and realization solutions in North America, South America, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers FaroArm, a combination of a portable articulated measurement arm, a computer, and CAM2 software programs; FARO Laser Tracker, a combination of a portable large-volume laser measurement tool, a computer, and CAM2 software programs; FARO Laser Projector, which provides a virtual template that operators and assemblers can use to quickly and accurate position components; and FARO Laser Scanning Portfolio to measure and collect a cloud of data points. It also provides FARO ScanPlan, a handheld mapper that captures two-dimensional floor plans; and FARO Software, a software solution that integrate with FARO hardware products to merge data and provide collaborative workflows and applications. The company offers its products for metrology, reverse engineering, factory automation, building information modeling, public safety, and other applications. FARO Technologies, Inc. was founded in 1981 and is headquartered in Lake Mary, Florida.
How the Company Makes MoneyFaro Technologies generates revenue through the sale of its advanced 3D measurement and imaging products, as well as through accompanying software solutions that enhance the functionality of its hardware offerings. The company also earns income by providing services such as training, maintenance, and support to its clients. Key revenue streams include direct sales to end-users in industries like aerospace, automotive, and architecture, as well as through partnerships with distributors and resellers. FARO's revenue is further supported by long-term service contracts and software licensing agreements that ensure recurring income. Additionally, the company benefits from strategic collaborations with technology and industry leaders, which help expand its market reach and drive sales growth.
Faro Technologies Financial Statement Overview
Summary
Faro Technologies is experiencing challenges in revenue growth and profitability, with consistent net losses and declining revenues. The balance sheet remains stable with moderate leverage, but cash flow improvements are overshadowed by declining free cash flow growth. The company needs to focus on reversing revenue declines and improving profitability to enhance its financial position.Income Statement
Faro Technologies has faced declining revenue over recent periods, with a notable decrease from $358.8M in 2023 to $341M in TTM (Trailing-Twelve-Months) 2025. The net profit margin remains negative as the company reported a net loss. The EBIT and EBITDA margins have shown slight improvement in recent periods, indicating some operational efficiency gains.45
Neutral
Balance Sheet
The balance sheet shows a reasonable debt-to-equity ratio, indicating moderate leverage. The company's stockholders' equity is healthy, comprising a significant portion of total assets, which suggests financial stability. However, the return on equity remains negative due to continued losses, impacting overall shareholder value.60
Neutral
Cash Flow
Cash flow analysis reveals positive operating cash flow and free cash flow in TTM 2025, reflecting an improvement in cash generation capabilities. However, the free cash flow growth rate is negative compared to prior periods, and the operating cash flow to net income ratio is high due to net losses, indicating reliance on non-operating sources for cash generation.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 342.43M | 358.83M | 345.76M | 337.81M | 303.77M | Gross Profit |
| 187.15M | 165.00M | 175.76M | 183.93M | 159.85M | EBIT |
| 3.33M | -49.54M | -20.31M | -1.14M | -14.88M | EBITDA |
| 18.35M | -35.23M | -7.55M | 5.18M | -16.23M | Net Income Common Stockholders |
| -9.07M | -56.58M | -26.76M | -39.96M | 629.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 98.70M | 96.28M | 37.81M | 121.99M | 185.63M | Total Assets |
| 483.00M | 504.69M | 473.35M | 479.74M | 525.59M | Total Debt |
| 88.80M | 89.03M | 20.36M | 24.39M | 27.97M | Net Debt |
| 94.00K | 12.24M | -17.45M | -97.60M | -157.67M | Total Liabilities |
| 233.40M | 236.09M | 162.30M | 153.28M | 165.29M | Stockholders Equity |
| 249.61M | 268.61M | 311.05M | 326.46M | 360.30M |
| Cash Flow | Free Cash Flow | |||
| 24.79M | -12.92M | -41.79M | -25.42M | 15.32M | Operating Cash Flow |
| 30.63M | 1.07M | -24.86M | -13.48M | 21.39M | Investing Cash Flow |
| -3.19M | -33.49M | -49.90M | -45.74M | 13.91M | Financing Cash Flow |
| -12.85M | 71.28M | -997.00K | 1.58M | 11.06M |
Faro Technologies Technical Analysis
Positive
30.81
Price Trends
28.17
Positive
28.30
Positive
23.75
Positive
Market Momentum
0.99
Negative
63.97
Neutral
85.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FARO, the sentiment is Positive. The current price of 30.81 is above the 20-day moving average (MA) of 27.08, above the 50-day MA of 28.17, and above the 200-day MA of 23.75, indicating a bullish trend. The MACD of 0.99 indicates Negative momentum. The RSI at 63.97 is Neutral, neither overbought nor oversold. The STOCH value of 85.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FARO.
Faro Technologies Risk Analysis
Faro Technologies disclosed 42 risk factors in its most recent earnings report. Faro Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Faro Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $477.25M | 22.32 | 10.42% | 1.25% | 17.89% | -23.37% | |
63 Neutral | $380.15M | 28.28 | 5.10% | 0.53% | -8.41% | -47.10% | |
61 Neutral | $592.36M | ― | -0.34% | ― | -4.76% | 97.93% | |
60 Neutral | $10.93B | 10.46 | -6.70% | 2.99% | 7.54% | -12.22% | |
57 Neutral | $448.09M | ― | -53.83% | ― | 33.41% | 81.07% | |
47 Neutral | $378.24M | ― | -63.44% | ― | 9.23% | 51.61% | |
45 Neutral | $270.37M | ― | -134.07% | ― | -35.31% | -2.18% |
* Technology Sector Average
Performance Comparison
FARO
Faro Technologies
31.45
13.21
72.42%
ALNT
Allient
21.74
-8.77
-28.74%
LYTS
Lsi Industries
15.52
0.37
2.44%
MVIS
Microvision
1.11
-0.56
-33.53%
KULR
KULR Technology Group
1.28
0.84
190.91%
OUST
Ouster
7.97
-1.85
-18.84%
Faro Technologies Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 16.70%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
FARO Technologies showed strong performance in Q1 2025, exceeding targets and achieving significant growth in EBITDA and non-GAAP EPS. The company launched several successful new products and formed strategic partnerships, signaling positive future growth. However, challenges with tariff uncertainties and a decline in revenue in the Americas were noted. Overall, the company is well-positioned to manage these challenges with strategic initiatives in place.Q1-2025 Updates
Positive Updates
Exceeding Targets
FARO Technologies exceeded all targets in Q1 2025, with revenue of $82.9 million, non-GAAP gross margins of 57.7%, and non-GAAP operating expenses of $38.5 million. Non-GAAP EPS reached $0.33, the highest Q1 in company history.
Significant EBITDA Growth
EBITDA for Q1 2025 was $12.5 million, representing 124% year-over-year growth and an 840 basis point expansion.
Product Refresh and New Launches
FARO launched several new products, including Leap ST and Blink, which have seen strong early market reception, contributing to revenue growth in Q1.
Strategic Partnerships
Two major global partnership agreements were signed, each expected to contribute low eight figures in revenue annually.
Negative Updates
Revenue Decline in the Americas
Revenue in the Americas region was down 3% due to tariff-related uncertainties.
Tariff Challenges
Uncertainty around tariffs, particularly a potential 36% tariff on Thailand, could impact gross margins by $10 million.
Company Guidance
In the first quarter of 2025, FARO Technologies reported revenue of $82.9 million, which was at the upper end of their guidance range. The company achieved non-GAAP gross margins of 57.7%, surpassing the high end of their guidance range, while non-GAAP operating expenses were $38.5 million, at the low end of their guidance. The company generated $0.33 of non-GAAP EPS, marking the highest Q1 in its history and the eighth consecutive quarter of exceeding expectations. FARO also reported $12.5 million in EBITDA, representing a 124% increase year-over-year, and maintained positive operating cash flow for the sixth consecutive quarter. Despite a challenging macroeconomic environment, including tariff uncertainties, FARO's strategic initiatives, such as product launches and partnerships, contributed to a 6% year-over-year increase in net orders during the quarter. The company remains focused on its long-term strategy and is confident in its ability to drive shareholder value through continued operational excellence and strategic growth initiatives.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.