3D measurement and imaging company FARO (NASDAQ:FARO) will be reporting results tomorrow after the bell. Here’s what to look for.
FARO beat analysts’ revenue expectations by 4.5% last quarter, reporting revenues of $82.56 million, down 4.9% year on year. It was an exceptional quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations.
Is FARO a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting FARO’s revenue to decline 7.5% year on year to $91.4 million, a further deceleration from the 4.8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.40 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. FARO has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 3.3% on average.
Looking at FARO’s peers in the inspection instruments segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Teledyne delivered year-on-year revenue growth of 5.4%, beating analysts’ expectations by 3.6%, and Mirion reported revenues up 10.4%, topping estimates by 3.8%. Teledyne traded up 7.2% following the results while Mirion was also up 1.3%.
Read our full analysis of Teledyne’s results here and Mirion’s results here.
Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good 2024. An economic soft landing (so far), the start of the Fed's rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the inspection instruments stocks have shown solid performance, the group has generally underperformed, with share prices down 6.2% on average over the last month. FARO is down 12.9% during the same time and is heading into earnings with an average analyst price target of $35 (compared to the current share price of $26.64).
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