FARO (NASDAQ:FARO) Beats Expectations in Strong Q3

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FARO (NASDAQ:FARO) Beats Expectations in Strong Q3 3D measurement and imaging company FARO (NASDAQ:FARO) reported revenue ahead of Wall Street’s expectations in Q3 CY2024, but sales fell 4.9% year...

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The company expects next quarter’s revenue to be around $92 million, close to analysts’ estimates. Its GAAP loss of $0.02 per share was also 93% above analysts’ consensus estimates.Revenue: $82.56 million vs analyst estimates of $78.97 million . EBITDA: $8.85 million vs analyst estimates of $4.82 million . Revenue Guidance for Q4 CY2024 is $92 million at the midpoint, roughly in line with what analysts were expecting. Gross Margin : 55.7%, up from 48% in the same quarter last year. EBITDA Margin: 10.7%, up from 3.5% in the same quarter last year. Free Cash Flow was $697,000, up from -$5.08 million in the same quarter last year. Launched by two PhD students in a garage, FARO  provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.We at StockStory place the most e","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NDAQ":"纳斯达克OMX交易所","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","BK4588":"碎股","FARO":"法如科技","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","BK4157":"电子设备和仪器","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","BK4112":"金融交易所和数据","BK4585":"ETF&股票定投概念",".IXIC":"NASDAQ Composite","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD"},"translate_title":"FARO（纳斯达克：FARO）第三季度表现强劲，超出预期","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".IXIC":1,"FARO":1,"NDAQ":1},"content_text":"FARO (NASDAQ:FARO) Beats Expectations in Strong Q3 \n \n\n3D measurement and imaging company FARO (NASDAQ:FARO) reported revenue ahead of Wall Street’s expectations in Q3 CY2024, but sales fell 4.9% year on year to $82.56 million. The company expects next quarter’s revenue to be around $92 million, close to analysts’ estimates. Its GAAP loss of $0.02 per share was also 93% above analysts’ consensus estimates. \nIs now the time to buy FARO? Find out in our full research report.\n\nFARO (FARO) Q3 CY2024 Highlights:\n\nRevenue: $82.56 million vs analyst estimates of $78.97 million (4.5% beat)\nEPS: -$0.02 vs analyst estimates of -$0.29 ($0.26 beat) \nEBITDA: $8.85 million vs analyst estimates of $4.82 million (83.6% beat)\nRevenue Guidance for Q4 CY2024 is $92 million at the midpoint, roughly in line with what analysts were expecting\nGross Margin (GAAP): 55.7%, up from 48% in the same quarter last year\nOperating Margin: 2.6%, up from -5.2% in the same quarter last year\nEBITDA Margin: 10.7%, up from 3.5% in the same quarter last year\nFree Cash Flow was $697,000, up from -$5.08 million in the same quarter last year\nMarket Capitalization: $354.3 million\n\n\n\"I am proud of our ongoing progress in profitability, achieving 55.7% gross margins, GAAP net loss of $0.3 million and $8.9 million of adjusted EBITDA, or 10.7% of revenue, all exceeding our expectations for the third quarter. This marks a significant transformation in our operations over the past year, as its the first time that we have delivered back-to-back double-digit quarterly adjusted EBITDA margins in almost a decade,\" said Peter Lau, President & Chief Executive Officer.\nCompany Overview\nLaunched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries. \nInspection Instruments\nMeasurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.\nSales Growth\nReviewing a company’s long-term performance can reveal insights into its business quality. Any business can have short-term success, but a top-tier one sustains growth for years. FARO struggled to generate demand over the last five years as its sales dropped by 2.3% annually, a rough starting point for our analysis. \n\nWe at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. FARO’s revenue over the last two years was flat, sugggesting its demand was weak but stabilized after its initial drop in sales. \nThis quarter, FARO’s revenue fell 4.9% year on year to $82.56 million but beat Wall Street’s estimates by 4.5%. Management is currently guiding for a 6.9% year-on-year decline next quarter. \nLooking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and shows the market believes its products and services will face some demand challenges. \nUnless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.\nOperating Margin\nAlthough FARO was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 4.1% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle. \nOn the plus side, FARO’s annual operating margin rose by 6.6 percentage points over the last five years. Still, it will take much more for the company to show consistent profitability. \n\nThis quarter, FARO generated an operating profit margin of 2.6%, up 7.8 percentage points year on year. The increase was solid, and since its operating margin rose more than its gross margin, we can infer it was recently more efficient with expenses such as marketing, R&D, and administrative overhead. \nEarnings Per Share\nAnalyzing revenue trends tells us about a company’s historical growth, but the long-term change in its earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. \nAlthough FARO’s full-year earnings are still negative, it reduced its losses and improved its EPS by 1.8% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. \n\nLike with revenue, we analyze EPS over a more recent period because it can give insight into an emerging theme or development for the business. For FARO, its two-year annual EPS growth of 66.2% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history. \nIn Q3, FARO reported EPS at negative $0.02, up from negative $0.46 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects FARO to perform poorly. Analysts forecast its full-year EPS of negative $0.35 will tumble to negative $0.52. \nKey Takeaways from FARO’s Q3 Results\nWe were impressed by how significantly FARO blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. Zooming out, we think this was a good quarter with some key areas of upside. The stock remained flat at $18.83 immediately following the results. \nIndeed, FARO had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2481651869"}