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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Faro Technologies, Inc. (XNAS:FARO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FARO
Name:
FARO TECHNOLOGIES, INC. (XNAS:FARO)
Sector:
- 12091.00K
Industry:
Scientific & Technical Instruments
CEO:
Mr. Michael Burger
Total Employees:
1,432
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -93.27% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FARO TECHNOLOGIES, INC.(FARO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SCIENTIFIC & TECHNICAL INSTRUMENTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
32.25
One Month Price Target:
$32.5
Six Month Price Target :
$33.78
Likely Price in One Year's Time:
Ticker:
$35.31
Likely Trading Range Today Under (Normal Volatility)
$32.08
Price Upper limit ($) :
$32.4
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$30.33
This week:
$27.96
This month :
$23.67
Other Primary facts
Market Cap:
582.90M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
18.28M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.36%
-20.94%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$41.17
$37.13
$23.33
$27.37
Medium risk (<10%) entry points
Buy Call
Sell Call
$35.82
Buy Put:
Sell Put:
$34.96
$28.67
$29.54
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FARO
Sharpe Ratio:
-1.20%
Comparison:
FARO, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -188.65% lower than the industry
& is -152.82% lower than the market/S&P 500 average
Average Returns/Yield of
FARO
Daily returns:
-0.03%
Weekly returns:
-0.13%
Monthly returns:
-0.52%
Yearly returns:
11.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -156.16% below industry average
Classification:
FARO, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.19
Statistical test of Returns:
FARO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.89%
Weekly Volatility:
6.45%
Monthly Volatility:
12.90%
Yearly Volatility:
44.70%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.54%
Volatility in last five trading days has been -12.05% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.95%
Weekly VaR:
-13.31%
Monthly VaR:
-26.62%
How Much Can the price of
FARO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
-92.21%
This translates to price declining to:
$24.56
This translates to price declining to:
$2.51
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
FARO is a 87.88% riskier investment compared to the market/S&P 500 & is 60.95% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.74% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FARO
Beta in relation to market/S&P 500--1.41
Expected beta in 1 year's time:
1.025
Expected beta in 3 year's time:
1.45
Unlevered (debt free) Beta:
1.146
Beta in relation to Nasdaq (XNAS):
0.931
Beta in relation to all global stocks::
0.784
Beta Comparison & Analysis
Beta of competitors/peers::
1.088
Beta is 29.79% higher than peers
Average Industry Beta:
1.276
Beta is 10.67% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.38%
Sustainable growth rate is -75.34% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.190
Alpha is 2208.17% above industry average alpha yield
Alpha is -1212% below the market average
Analysis of Cost of Capital of
FARO
Equity cost of capital:
0.128
Equity cost of capital is 7.84% above industry mean WACC
Unlevered (without debt) cost of capital:
10.41%
Before-tax cost of debt:
0.06%
After-tax cost of debt:
0.05%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.05%
WACC is 26.60% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.50
Revenue growth rate per share of (3Y):
1.86
Annual revenue growth rate is -234.35% below industry average
EPS:
-$2.55
Expected Annual growth rate of EPS (3Y):
-14.98%
Expected future EPS growth rate is -363.97% lower than the Scientific & Technical Instruments industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.95
EBITDA per share
$0.13
Valuation Analysis Today of
FARO
P/E Ratio:
54.38
P/E Ratio of Competitors/Peers:
297.71
P/E ratio is -81.74% lower than main peers & is 25.38% higher than the industry
-
FARO is -129.16% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.74
Price to sales ratio is -64.21% below the industry mean
P/B (Price to book value ratio):
1.86
-
-
Net income growth rate (3Y):
-859.61%
Net income growth rate is 3058.14% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
5.46%
Net debt to equity ratio:
-26.60%
Debt to assets ratio:
3.69%
Net debt to assets ratio:
-18.01%
Debt-to-asset ratio is -92.19% below industry average
Ability to repay debt:
Interest coverage ratio:
165.5
Interest coverage ratio is 1336.13% more than industry average
Looking forward:
Debt growth rate:
-12.80%
Annual debt growth is -116% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.33%
Analysis of Key Statistics
Correlation of price movement with the market:
0.597
Statistical significance of correlation:
FARO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.619
Stock price is -3.70% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.619
Correlation of price movement with Nasdaq (^IXIC):
-0.033
Covariance of price movement with the market:
-0.056
Kurtosis
7.599
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.137
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FARO
Gross Profit Margin Ratio:
218%
Operating Profit Margin Ratio:
-2.72%
Operating profit margin is -125.81% lower than the industry
Net Profit Margin Ratio:
218%
Effective Tax Rate:
-325.38%
Effective tax rate is -911.63% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-14.66%
Return on equity (ROE) is -176.21% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-9.92%
Return on assets (ROA) is -284.96% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
2.66
Current ratio is 12.96% above industry average
Cash Conversion Cycle (days):
82.2
Cash conversion cycle is 48.08% above industry average
The remaining useful life of property plant & equipment is: 19.5 years
Stock based compensation to net income ratio:
-6.17%
In-depth Efficiency Analysis
Revenue generated per employee:
236.1K
Each employee generates -27% less revenue than industry average revenue per employee
EBITDA generated per employee:
1.6K
Each employee generates -97% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 32.4K
Each employee generates -194% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 8.4K
Each employee generates -312% less free cash flow than industry average revenue per employee
Assets/Capital per employee
144.5K
Each employee generates -312% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 13.67%
Growth rate in R&D investment/expenditure is 360.70% higher than the industry
Competitors/Peer firms of
FARO
MESA LABORATORIES, INC. (XNAS:MLAB)
Paya Holdings Inc. (XNAS:PAYA)
STRATASYS LTD (XNAS:SSYS)
LORL
UPLAND SOFTWARE, INC. (XNAS:UPLD)
IMPINJ, INC. (XNAS:PI)
EVO PAYMENTS, INC. (XNAS:EVOP)
CAMTEK LTD (XNAS:CAMT)
AGILYSYS, INC. (XNAS:AGYS)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
338.14M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
153.59M
184.55M
48.92M
-
138.38M
-
-
187.29M
-
14.00K
13.22M
2.32M
- 9190.00K
- 46430.00K
- 10915.00K
35.52M
- 46430.00K
Statement of Cash Flow
Date:
Period:
3.01M
Differed Income Tax :
66.00K
Stock Based Compensation :
2.87M
Change in Working Capital :
- 3652.00K
Accounts Receivables:
1.45M
Other Working Capital:
698.00K
Other Non-Cash Items:
357.00K
Net Cash Provided by Operating Activities:
- 7037.00K
Investments in PP&E:
- 2442.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
107.19M
-
107.19M
76.75M
53.99M
23.06M
260.99M
43.60M
81.51M
27.22M
-
20.71M
33.87M
206.91M
-
467.90M
14.79M
5.65M
8.56M
46.16M
31.41M
98.02M
17.29M
12.33M
53.15M
-
151.16M
20.00K
63.86M
- 19358.0K
-
March 31, 2022 at 6:00:00 AM
340.89M
316.74M
467.90M
-
22.94M
- 84251.0K
-
- 2612.00K
- 5054.00K
- 58.00K
-
-
-
- 916.00K
- 974.00K
- 1732.00K
- 14797.00K
107.19M
121.99M
- 7037.00K
- 5054.00K
- 12091.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
FARO
2023
2024
2025
2026
2027
$35.42
$38.78
$42.46
$46.49
$50.90