Taking on analysts’ expectations and winning: FARO Technologies Inc. (FARO)

FARO Technologies Inc. (NASDAQ: FARO) stock fell -21.05% on Friday to $27.87 against a previous-day closing price of $35.30. With 1.75 million shares changed hands, the volume of the stock remained heavier than its average volume of 96820.0 shares. During the session, the Scientific & Technical Instruments company that operates in wider Technology sector, reached to the highest price of $28.57 whereas the lowest price it dropped to was $26.13. The 52-week range on FARO shows that it touched its highest point at $61.20 and its lowest point at $25.20 during that stretch. It currently has a 1-year price target of $39.00. Beta for the stock currently stands at 1.35.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of FARO was down-trending over the past week, with a drop of -18.39%, but this was down by -2.14% over a month. Three-month performance surged to 6.25% while six-month performance fell -13.66%. The stock lost -52.15% in the past year, while it has lost -5.24% so far this year. A look at the trailing 12-month EPS for FARO yields -3.08 with Next year EPS estimates of 0.58. For the next quarter, that number is 0.34. This implies an EPS growth rate of -64.30% for this year and 193.40% for next year. EPS is expected to grow by 30.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -39.60%.

Float and Shares Shorts:

At present, 18.78 million FARO shares are outstanding with a float of 18.59 million shares on hand for trading. On Oct 13, 2022, short shares totaled 0.52 million, which was 2.78% higher than short shares on Sep 14, 2022. In addition to Mr. Michael D. Burger as the firm’s Pres, CEO & Director, Mr. Allen L. Muhich serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 107.13% of FARO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 65.99% of FARO, in contrast to 4.72% held by mutual funds. Shares owned by individuals account for 34.95%. As the largest shareholder in FARO with 14.98% of the stake, BlackRock Fund Advisors holds 2,813,817 shares worth 2,813,817. A second-largest stockholder of FARO, The Vanguard Group, Inc., holds 2,118,414 shares, controlling over 11.28% of the firm’s shares. Royce & Associates LP is the third largest shareholder in FARO, holding 1,020,376 shares or 5.43% stake. With a 7.40% stake in FARO, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 1,389,236 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.91% of FARO stock, is the second-largest Mutual Fund holder. It holds 546,929 shares valued at 16.09 million. Vanguard Small Cap Index Fund holds 2.58% of the stake in FARO, owning 483,974 shares worth 14.23 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for FARO since 4 analysts follow the stock currently. There are 1 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With FARO analysts setting a high price target of $55.00 and a low target of $30.00, the average target price over the next 12 months is $39.00. Based on these targets, FARO could surge 97.34% to reach the target high and rise by 7.64% to reach the target low. Reaching the average price target will result in a growth of 39.94% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. FARO will report FY 2022 earnings on 02/15/2024. Analysts have provided yearly estimates in a range of $0.23 being high and -$0.02 being low. For FARO, this leads to a yearly average estimate of $0.14. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. FARO Technologies Inc. surprised analysts by $0.07 when it reported $0.03 EPS against a consensus estimate of -$0.04. The surprise factor in the prior quarter was $0.06. Based on analyst estimates, the high estimate for the next quarter is $0.37 and the low estimate is $0.30. The average estimate for the next quarter is thus $0.34.

Summary of Insider Activity:

Insiders traded FARO stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 8 over the past year. The total number of shares bought during that period was 101,570 while 10,538 shares were sold.

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