Investors in FARO Technologies, Inc. (NASDAQ:FARO) had a good week, as its shares rose 4.1% to close at US$28.57 following the release of its full-year results. Revenues came in at US$346m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$1.46 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for FARO Technologies

After the latest results, the four analysts covering FARO Technologies are now predicting revenues of US$375.5m in 2023. If met, this would reflect a decent 8.6% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 54% to US$0.66. Before this latest report, the consensus had been expecting revenues of US$374.0m and US$0.40 per share in losses. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at US$38.00, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on FARO Technologies, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$30.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that FARO Technologies is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.6% annualised growth until the end of 2023. If achieved, this would be a much better result than the 4.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.2% annually. So it looks like FARO Technologies is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at FARO Technologies. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$38.00, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for FARO Technologies going out to 2024, and you can see them free on our platform here..

Even so, be aware that FARO Technologies is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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