FARO Technologies Inc (NASDAQ:FARO), a electronic company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $64.4 and falling to the lows of $50.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether FARO Technologies’s current trading price of $54.2 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at FARO Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for FARO Technologies
What is FARO Technologies worth?According to my valuation model, the stock is currently overvalued by about 95.72%, trading at US$54.20 compared to my intrinsic value of $27.69. This means that the opportunity to buy FARO Technologies at a good price has disappeared! But, is there another opportunity to buy low in the future? Since FARO Technologies’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will FARO Technologies generate?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. In FARO Technologies’s case, its revenues over the next few years are expected to grow by 35.34%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? FARO’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe FARO should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on FARO for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for FARO, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on FARO Technologies. You can find everything you need to know about FARO Technologies in the latest infographic research report. If you are no longer interested in FARO Technologies, you can use our free platform to see my list of over 50 other stocks with a high growth potential.