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The FARO Technologies (NASDAQ:FARO) Share Price Has Gained 30% And Shareholders Are Hoping For More

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Simply Wall St
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Low-cost index funds make it easy to achieve average market returns. But if you invest in individual stocks, some are likely to underperform. Unfortunately for shareholders, while the FARO Technologies, Inc. (NASDAQ:FARO) share price is up 30% in the last three years, that falls short of the market return. Looking at more recent returns, the stock is up 11% in a year.

View our latest analysis for FARO Technologies

Given that FARO Technologies didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years FARO Technologies has grown its revenue at 8.3% annually. That's a very respectable growth rate. The annual gain of 9.1% over three years is better than nothing, but hardly impresses. Arguably, that means, the market (previously) expected stronger growth from the company. However, if you can reasonably expect profits in the next few years, this stock might belong on your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NasdaqGS:FARO Income Statement, December 19th 2019
NasdaqGS:FARO Income Statement, December 19th 2019

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

FARO Technologies shareholders gained a total return of 11% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 5.4% endured over half a decade. So this might be a sign the business has turned its fortunes around. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.