FARO TECHNOLOGIES INC (FARO) Stock Fundamental Analysis
NASDAQ:FARO - Nasdaq - US3116421021 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to FARO. FARO was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. The financial health of FARO is average, but there are quite some concerns on its profitability. FARO is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year FARO was profitable.
FARO had a positive operating cash flow in the past year.
FARO had negative earnings in 4 of the past 5 years.
In multiple years FARO reported negative operating cash flow during the last 5 years.
1.2 Ratios
FARO has a Return On Assets (-1.33%) which is comparable to the rest of the industry.
FARO has a Return On Equity of -2.54%. This is comparable to the rest of the industry: FARO outperforms 45.83% of its industry peers.
The Return On Invested Capital of FARO (0.18%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.33% | ||
| ROE | -2.54% | ||
| ROIC | 0.18% |
ROA(3y)-8.4%
ROA(5y)-7.57%
ROE(3y)-13.98%
ROE(5y)-12.09%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
FARO has a Operating Margin of 0.24%. This is comparable to the rest of the industry: FARO outperforms 45.83% of its industry peers.
FARO has a Gross Margin of 53.02%. This is amongst the best in the industry. FARO outperforms 90.83% of its industry peers.
FARO's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.24% | ||
| PM (TTM) | N/A | ||
| GM | 53.02% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.38%
GM growth 5Y-3.49%
2. Health
2.1 Basic Checks
FARO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, FARO has more shares outstanding
FARO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, FARO has a worse debt to assets ratio.
2.2 Solvency
FARO has an Altman-Z score of 2.34. This is not the best score and indicates that FARO is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of FARO (2.34) is worse than 60.83% of its industry peers.
The Debt to FCF ratio of FARO is 3.55, which is a good value as it means it would take FARO, 3.55 years of fcf income to pay off all of its debts.
FARO has a better Debt to FCF ratio (3.55) than 60.83% of its industry peers.
FARO has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
FARO has a Debt to Equity ratio (0.27) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 3.55 | ||
| Altman-Z | 2.34 |
ROIC/WACC0.02
WACC8.77%
2.3 Liquidity
A Current Ratio of 2.17 indicates that FARO has no problem at all paying its short term obligations.
FARO has a Current ratio (2.17) which is comparable to the rest of the industry.
A Quick Ratio of 1.83 indicates that FARO should not have too much problems paying its short term obligations.
FARO has a Quick ratio (1.83) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 800.00% over the past year.
The Revenue has decreased by -4.44% in the past year.
Measured over the past years, FARO shows a decrease in Revenue. The Revenue has been decreasing by -2.32% on average per year.
EPS 1Y (TTM)800%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%950%
Revenue 1Y (TTM)-4.44%
Revenue growth 3Y5.71%
Revenue growth 5Y-2.32%
Sales Q2Q%-4.9%
3.2 Future
FARO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 205.38% yearly.
The Revenue is expected to decrease by -0.38% on average over the next years.
EPS Next Y731.67%
EPS Next 2Y205.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-4.56%
Revenue Next 2Y-0.38%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.74 indicates a quite expensive valuation of FARO.
FARO's Price/Earnings ratio is in line with the industry average.
FARO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 25.99, FARO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FARO is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, FARO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.74 | ||
| Fwd PE | 25.99 |
4.2 Price Multiples
FARO's Enterprise Value to EBITDA ratio is in line with the industry average.
FARO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FARO is cheaper than 65.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.57 | ||
| EV/EBITDA | 31.35 |
4.3 Compensation for Growth
FARO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
FARO's earnings are expected to grow with 205.38% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y205.38%
EPS Next 3YN/A
5. Dividend
5.1 Amount
FARO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
26.66
-1.17 (-4.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners101.17%
Inst Owner Change-0.88%
Ins Owners2.74%
Ins Owner Change-1.45%
Market Cap504.41M
Analysts82.5
Price Target34.17 (28.17%)
Short Float %5.3%
Short Ratio4.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1114.42%
Min EPS beat(2)564.14%
Max EPS beat(2)1664.71%
EPS beat(4)4
Avg EPS beat(4)618.46%
Min EPS beat(4)69.28%
Max EPS beat(4)1664.71%
EPS beat(8)7
Avg EPS beat(8)308.97%
EPS beat(12)9
Avg EPS beat(12)183.96%
EPS beat(16)11
Avg EPS beat(16)132.23%
Revenue beat(2)1
Avg Revenue beat(2)-0.65%
Min Revenue beat(2)-3.8%
Max Revenue beat(2)2.5%
Revenue beat(4)3
Avg Revenue beat(4)0.33%
Min Revenue beat(4)-3.8%
Max Revenue beat(4)2.5%
Revenue beat(8)5
Avg Revenue beat(8)1.24%
Revenue beat(12)5
Avg Revenue beat(12)-0.59%
Revenue beat(16)6
Avg Revenue beat(16)-0.14%
PT rev (1m)13.56%
PT rev (3m)36.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.74 | ||
| Fwd PE | 25.99 | ||
| P/S | 1.45 | ||
| P/FCF | 25.57 | ||
| P/OCF | 15.76 | ||
| P/B | 1.97 | ||
| P/tB | 5.14 | ||
| EV/EBITDA | 31.35 |
EPS(TTM)0.84
EY3.15%
EPS(NY)1.03
Fwd EY3.85%
FCF(TTM)1.04
FCFY3.91%
OCF(TTM)1.69
OCFY6.35%
SpS18.38
BVpS13.51
TBVpS5.19
PEG (NY)0.04
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.33% | ||
| ROE | -2.54% | ||
| ROCE | 0.22% | ||
| ROIC | 0.18% | ||
| ROICexc | 0.23% | ||
| ROICexgc | 0.51% | ||
| OM | 0.24% | ||
| PM (TTM) | N/A | ||
| GM | 53.02% | ||
| FCFM | 5.67% |
ROA(3y)-8.4%
ROA(5y)-7.57%
ROE(3y)-13.98%
ROE(5y)-12.09%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.38%
GM growth 5Y-3.49%
F-Score5
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 3.55 | ||
| Debt/EBITDA | 4.33 | ||
| Cap/Depr | 80% | ||
| Cap/Sales | 3.53% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 197.65% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.83 | ||
| Altman-Z | 2.34 |
F-Score5
WACC8.77%
ROIC/WACC0.02
Cap/Depr(3y)100.43%
Cap/Depr(5y)78.27%
Cap/Sales(3y)4.11%
Cap/Sales(5y)3.33%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)800%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%950%
EPS Next Y731.67%
EPS Next 2Y205.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-4.44%
Revenue growth 3Y5.71%
Revenue growth 5Y-2.32%
Sales Q2Q%-4.9%
Revenue Next Year-4.56%
Revenue Next 2Y-0.38%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y102.38%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year1141.19%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y155.78%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y299.19%
OCF growth 3Y-63.1%
OCF growth 5Y-29.83%