Stifel downgrades FARO Technologies: premium valuation, high expectations

Stifel Nicolaus downgraded shares of FARO Technologies (FARO -1.8%) from Buy to Hold and removed its $50 PT.

Analyst Patrick Newton notes, "shares have eclipsed our $50 price target and our analysis indicates a neutral reward to risk profile at current levels."

Newton cites FARO's premium valuation relative to historical norms and comparables, investor expectations of "aggressive leverage and earnings power in excess of our above consensus 3015 estimates," increasing execution risk, concerns over laser scanner growth, and the negative effect current penetration levels of the Arm business may have on future growth levels.

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Comments (1)
  • doug.whatzup
    , contributor
    Comments (209) | Send Message
    Interesting that the $50 PT was achieved at the beginning of November. And that, since then, the stock had gained 20% before the sell-off created by Patrick Newton's "analysis." FARO is a great 3D play and much safer than some of the pure play alternatives (XONE, etc.). Would recommend this to Newton and anybody else:
    29 Dec 2013, 06:06 AM Reply Like
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