FARO TECHNOLOGIES INC (FARO) Stock Fundamental Analysis
NASDAQ:FARO - Nasdaq - US3116421021 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to FARO. FARO was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. While FARO seems to be doing ok healthwise, there are quite some concerns on its profitability. FARO is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year FARO was profitable.
In the past year FARO had a positive cash flow from operations.
In the past 5 years FARO reported 4 times negative net income.
The reported operating cash flow has been mixed in the past 5 years: FARO reported negative operating cash flow in multiple years.
1.2 Ratios
FARO has a Return On Assets (-1.88%) which is in line with its industry peers.
Looking at the Return On Equity, with a value of -3.63%, FARO is in line with its industry, outperforming 46.77% of the companies in the same industry.
With a Return On Invested Capital value of 1.39%, FARO perfoms like the industry average, outperforming 53.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.88% | ||
| ROE | -3.63% | ||
| ROIC | 1.39% |
ROA(3y)-6.25%
ROA(5y)-5.39%
ROE(3y)-11.1%
ROE(5y)-9.08%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Operating Margin of FARO (1.90%) is comparable to the rest of the industry.
FARO's Gross Margin of 54.65% is amongst the best of the industry. FARO outperforms 90.32% of its industry peers.
In the last couple of years the Gross Margin of FARO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.9% | ||
| PM (TTM) | N/A | ||
| GM | 54.65% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.13%
GM growth 5Y1.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so FARO is destroying value.
FARO has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for FARO has been increased compared to 5 years ago.
FARO has a worse debt/assets ratio than last year.
2.2 Solvency
FARO has an Altman-Z score of 2.22. 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.
FARO's Altman-Z score of 2.22 is on the low side compared to the rest of the industry. FARO is outperformed by 60.48% of its industry peers.
The Debt to FCF ratio of FARO is 4.03, which is a neutral value as it means it would take FARO, 4.03 years of fcf income to pay off all of its debts.
FARO's Debt to FCF ratio of 4.03 is fine compared to the rest of the industry. FARO outperforms 63.71% of its industry peers.
A Debt/Equity ratio of 0.28 indicates that FARO is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.28, FARO perfoms like the industry average, outperforming 41.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 4.03 | ||
| Altman-Z | 2.22 |
ROIC/WACC0.16
WACC8.7%
2.3 Liquidity
FARO has a Current Ratio of 2.20. This indicates that FARO is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of FARO (2.20) is comparable to the rest of the industry.
FARO has a Quick Ratio of 1.91. This is a normal value and indicates that FARO is financially healthy and should not expect problems in meeting its short term obligations.
FARO has a Quick ratio (1.91) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.2 | ||
| Quick Ratio | 1.91 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 800.00% over the past year.
Measured over the past years, FARO shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.51% on average per year.
Looking at the last year, FARO shows a decrease in Revenue. The Revenue has decreased by -4.57% in the last year.
The Revenue has been decreasing by -2.15% on average over the past years.
EPS 1Y (TTM)800%
EPS 3Y20.51%
EPS 5Y21.51%
EPS Q2Q%38.89%
Revenue 1Y (TTM)-4.57%
Revenue growth 3Y0.45%
Revenue growth 5Y-2.15%
Sales Q2Q%-5.37%
3.2 Future
Based on estimates for the next years, FARO will show a very strong growth in Earnings Per Share. The EPS will grow by 20.93% on average per year.
The Revenue is expected to grow by 4.02% on average over the next years.
EPS Next Y22.82%
EPS Next 2Y20.93%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.38%
Revenue Next 2Y4.02%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 24.70 indicates a rather expensive valuation of FARO.
The rest of the industry has a similar Price/Earnings ratio as FARO.
Compared to an average S&P500 Price/Earnings ratio of 28.29, FARO is valued at the same level.
A Price/Forward Earnings ratio of 20.11 indicates a rather expensive valuation of FARO.
The rest of the industry has a similar Price/Forward Earnings ratio as FARO.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, FARO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.11 |
4.2 Price Multiples
FARO's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, FARO is valued a bit cheaper than 64.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.36 | ||
| EV/EBITDA | 18.92 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as FARO's earnings are expected to grow with 20.93% in the coming years.
PEG (NY)1.08
PEG (5Y)1.15
EPS Next 2Y20.93%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for FARO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
24.21
-0.55 (-2.22%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners101.17%
Inst Owner Change0%
Ins Owners2.74%
Ins Owner Change3.04%
Market Cap465.56M
Analysts82.5
Price Target39.27 (62.21%)
Short Float %5.48%
Short Ratio3.92
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)293.42%
Min EPS beat(2)22.7%
Max EPS beat(2)564.14%
EPS beat(4)4
Avg EPS beat(4)606.82%
Min EPS beat(4)22.7%
Max EPS beat(4)1664.71%
EPS beat(8)7
Avg EPS beat(8)310.48%
EPS beat(12)10
Avg EPS beat(12)186.18%
EPS beat(16)11
Avg EPS beat(16)122.97%
Revenue beat(2)2
Avg Revenue beat(2)1.62%
Min Revenue beat(2)0.74%
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)6
Avg Revenue beat(8)1.54%
Revenue beat(12)6
Avg Revenue beat(12)-0.14%
Revenue beat(16)6
Avg Revenue beat(16)-1.03%
PT rev (1m)0%
PT rev (3m)30.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)73.91%
EPS NY rev (1m)17.35%
EPS NY rev (3m)17.35%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.62%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.11 | ||
| P/S | 1.34 | ||
| P/FCF | 26.36 | ||
| P/OCF | 15 | ||
| P/B | 1.84 | ||
| P/tB | 4.65 | ||
| EV/EBITDA | 18.92 |
EPS(TTM)0.98
EY4.05%
EPS(NY)1.2
Fwd EY4.97%
FCF(TTM)0.92
FCFY3.79%
OCF(TTM)1.61
OCFY6.67%
SpS18.04
BVpS13.15
TBVpS5.21
PEG (NY)1.08
PEG (5Y)1.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.88% | ||
| ROE | -3.63% | ||
| ROCE | 1.76% | ||
| ROIC | 1.39% | ||
| ROICexc | 1.9% | ||
| ROICexgc | 4.26% | ||
| OM | 1.9% | ||
| PM (TTM) | N/A | ||
| GM | 54.65% | ||
| FCFM | 5.09% |
ROA(3y)-6.25%
ROA(5y)-5.39%
ROE(3y)-11.1%
ROE(5y)-9.08%
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 3Y0.13%
GM growth 5Y1.05%
F-Score5
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 4.03 | ||
| Debt/EBITDA | 3.16 | ||
| Cap/Depr | 83.88% | ||
| Cap/Sales | 3.85% | ||
| Interest Coverage | 1.59 | ||
| Cash Conversion | 137.66% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.2 | ||
| Quick Ratio | 1.91 | ||
| Altman-Z | 2.22 |
F-Score5
WACC8.7%
ROIC/WACC0.16
Cap/Depr(3y)98.69%
Cap/Depr(5y)85.56%
Cap/Sales(3y)4.22%
Cap/Sales(5y)3.64%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)800%
EPS 3Y20.51%
EPS 5Y21.51%
EPS Q2Q%38.89%
EPS Next Y22.82%
EPS Next 2Y20.93%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-4.57%
Revenue growth 3Y0.45%
Revenue growth 5Y-2.15%
Sales Q2Q%-5.37%
Revenue Next Year2.38%
Revenue Next 2Y4.02%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y119.05%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year82.86%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y234.91%
FCF growth 3YN/A
FCF growth 5Y-5.95%
OCF growth 1Y2749.21%
OCF growth 3YN/A
OCF growth 5Y-1.16%