On Thursday, Craig-Hallum analyst Greg Palm increased the price target for shares of Faro Technologies (NASDAQ:FARO) to $36.00 from $33.00, while reiterating a Buy rating on the stock.
The upgrade comes as the company's shares have shown remarkable momentum, gaining over 13% in the past week and trading near its 52-week high of $30.10. Palm's adjustment follows Faro's updated long-term margin goals, which were presented during a competitor's conference this week.
Faro Technologies, known for its 3D measurement and imaging solutions, has revised its EBITDA margin targets upward due to noteworthy progress. With current EBITDA at $25.54 million and revenue of $347.73 million, the company now aims for a 20% EBITDA margin at $400 million in revenue, up from the previous 15% goal.
Moreover, at the current revenue level, Faro anticipates achieving EBITDA margins between 13-15%, which surpasses the approximately 11% margin that was initially modeled for fiscal year 2025. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value, with 10+ additional real-time insights available to subscribers.
According to Palm, the updated margin expectations bolster confidence in Faro's potential to reach $100 million in EBITDA in the near future. This would mark a substantial increase from the firm's fiscal year 2024 estimate.
The analyst pointed out that while an update to the margin targets was anticipated, the extent and timing of the revisions were unexpectedly positive. For deeper insights into Faro's financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and the exclusive Pro Research Report, part of our coverage of 1,400+ US stocks.
Investors are now looking forward to a positive outlook from Faro Technologies when the company announces its fourth-quarter results on February 12, 2025. The uplifted price target set by Craig-Hallum anticipates this optimistic forecast, suggesting a promising financial trajectory for Faro Technologies, with analyst consensus remaining bullish on the stock.
In other recent news, Faro Technologies has disclosed its financial results for the third quarter of 2024, with a focus on future prospects. The company's gross margin has significantly improved by over 500 basis points in the past year, despite a 4.43% decline in revenue. A Craig-Hallum analyst, after meetings with the company's CEO and CFO, maintained a buy rating and increased the stock target to $33.00, reflecting confidence in Faro's growth potential.
The analyst anticipates a multi-year upward trajectory for Faro Technologies, driven by internal improvements and a return to revenue growth. New product introductions and global partnership announcements in the next 3-6 months are expected to contribute to this growth. These developments, along with a refreshed product cycle and favorable pricing dynamics, are forecasted to drive revenue growth in fiscal year 2025.
InvestingPro data confirms the company's robust financial health, with a strong buy consensus among analysts. The company's strategic initiatives are expected to positively impact its financial outcomes in the coming year. These are the latest developments within Faro Technologies.
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