Faro Technologies (FARO) AI Stock Analysis

• Market Cap: $819.04M
• Dividend Yield: N/A
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.19
• Revenue Growth: -4.76%
• EPS Growth: 97.93%
• Country: US
• Employees: 1,181
• Sector: Technology
• Sector Strength: 84
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.33
• Shares Outstanding: 19,226,204
• 10 Day Avg. Volume: 557,161
• 30 Day Avg. Volume: 1,092,716
• PEG Ratio: 0.60
• Price to Book (P/B): 1.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -12.89
• Enterprise Value/Market Cap: 0.64
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 2.73
• Enterprise Value/Ebitda: 14.42
• 1Y Price Target: $44.00
• Price Target Upside: 3.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 66 Neutral
• Price Target: $46.00 ▲(8.11%Upside)

Faro Technologies presents a mixed outlook. The company struggles with financial performance but benefits from strong market momentum and strategic corporate actions, such as the merger with Ametek. The high valuation remains a concern due to negative earnings, but the positive earnings call and technical indicators suggest potential for future growth.

Positive Factors

Acquisition

FARO shares rose 35% on the news of the acquisition agreement.

Leadership

The company's financial performance has improved meaningfully since Peter Lau joined as CEO.

Strategic Growth

FARO is taking important steps to drive growth, including securing two new OEM/distribution agreements and new product introductions.

Negative Factors

Economic Conditions

FARO has faced the same top-line challenges affecting other industrial technology companies with the weak global PMI data.

Market Valuation

Analyst believes shares are fairly priced, leading to a lowered rating to Hold from Buy.

Sales Guidance

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.

Faro Technologies Business Overview & Revenue Model

Company Description

FARO Technologies, Inc. is a global technology company specializing in 3D measurement, imaging, and realization solutions. The company operates primarily in the manufacturing, construction, and public safety sectors, offering a range of products including 3D laser scanners, coordinate measuring machines, and software solutions. These products are used for applications such as quality assurance, inspection, and reverse engineering, enabling customers to take precise measurements of objects and spaces for various industrial and professional purposes.

How the Company Makes Money

FARO Technologies makes money through the sale of its 3D measurement and imaging devices, associated software, and related services. Key revenue streams include the direct sale of hardware products like laser scanners and coordinate measuring machines, which are often used in industries such as automotive, aerospace, and architecture. Additionally, the company generates recurring revenue from software licensing and subscription fees for its proprietary software solutions that complement its hardware offerings. FARO also earns income from maintenance contracts, training, and support services, which provide ongoing customer engagement and support. Strategic partnerships with technology and industry leaders help expand FARO's market reach and enhance its product offerings, further contributing to its revenue generation.

Faro Technologies Financial Statement Overview

Summary

Faro Technologies is facing challenges with declining revenue and consistent net losses. While there are improvements in operational efficiency and cash flow generation, the overall financial performance remains weak due to negative profitability and a declining free cash flow growth rate.

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.

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.

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
341.05M	342.43M	358.83M	345.76M	337.81M	303.77M
	Gross Profit
191.08M	187.15M	165.00M	175.76M	183.93M	159.85M
	EBIT
13.07M	3.33M	-49.54M	-20.31M	-1.14M	-14.88M
	EBITDA
28.20M	18.35M	-35.23M	-7.55M	5.18M	-16.23M
	Net Income Common Stockholders
-893.00K	-9.07M	-56.58M	-26.76M	-39.96M	629.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
102.63M	98.70M	96.28M	37.81M	121.99M	185.63M
	Total Assets
495.03M	483.00M	504.69M	473.35M	479.74M	525.59M
	Total Debt
92.06M	88.80M	89.03M	20.36M	24.39M	27.97M
	Net Debt
-381.00K	94.00K	12.24M	-17.45M	-97.60M	-157.67M
	Total Liabilities
234.86M	233.40M	236.09M	162.30M	153.28M	165.29M
	Stockholders Equity
260.17M	249.61M	268.61M	311.05M	326.46M	360.30M
Cash Flow		Free Cash Flow
22.13M	24.79M	-12.92M	-41.79M	-25.42M	15.32M
	Operating Cash Flow
29.09M	30.63M	1.07M	-24.86M	-13.48M	21.39M
	Investing Cash Flow
-3.22M	-3.19M	-33.49M	-49.90M	-45.74M	13.91M
	Financing Cash Flow
-12.83M	-12.85M	71.28M	-997.00K	1.58M	11.06M

Faro Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 42.55 is above the 20-day moving average (MA) of 42.30, above the 50-day MA of 34.91, and above the 200-day MA of 27.16, indicating a bullish trend. The MACD of 1.82 indicates Positive momentum. The RSI at 77.88 is Negative, neither overbought nor oversold. The STOCH value of 72.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FARO.

Faro Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LYTS	77 Outperform	$497.17M	23.19	10.42%	1.22%	17.89%	-23.37%
FARO	66 Neutral	$819.04M	―	-0.34%	―	-4.76%	97.93%
ALNT	66 Neutral	$576.09M	57.57	3.64%	0.35%	-10.99%	-61.37%
OUST	64 Neutral	$862.33M	―	-56.81%	―	28.04%	64.81%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%
KULR	55 Neutral	$352.19M	―	-67.89%	―	16.47%	27.19%
MVIS	50 Neutral	$304.10M	―	-135.21%	―	-41.76%	5.56%

Faro Technologies Corporate Events

FARO Technologies Holds Annual Shareholder Meeting

On May 21, 2025, FARO Technologies held its Annual Meeting of Shareholders, where four key proposals were voted on. The shareholders elected directors Moonhie Chin and Yuval Wasserman for three-year terms, ratified Grant Thornton LLP as the independent registered public accounting firm for 2025, approved executive compensation on a non-binding basis, and amended the 2022 Equity Incentive Plan to increase shares reserved for issuance by 1.5 million. These decisions reflect strategic moves to strengthen corporate governance and align executive incentives with shareholder interests.

The most recent analyst rating on (FARO) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Faro Technologies stock, see the FARO Stock Forecast page.

FARO Technologies Announces Merger with AMETEK

On May 5, 2025, FARO Technologies entered into a merger agreement with AMETEK, Inc., where FARO will become a wholly-owned subsidiary of AMETEK. The merger, expected to close in the second half of 2025, involves a cash consideration of $44.00 per share for FARO’s shareholders. The agreement includes several conditions, such as shareholder approval and regulatory clearances, and outlines the treatment of FARO’s stock options and restricted stock units. The merger aims to enhance FARO’s market positioning and operational efficiency, with potential implications for its stakeholders, including changes in stock listing and corporate structure.

FARO Technologies Announces Merger with Ametek

On May 5, 2025, FARO Technologies announced a merger agreement with Ametek, Inc., where Ametek will acquire all outstanding shares of FARO for $44 per share, valuing the transaction at approximately $920 million. This acquisition, approved by both companies’ boards, is expected to enhance Ametek’s presence in growth markets and is anticipated to close in the second half of 2025, pending customary conditions and shareholder approval.