What Happened?

Shares of 3D measurement and imaging company FARO (NASDAQ:FARO) jumped 18.1% in the afternoon session after the company reported a strong Q4 2024 quarter, with revenue, EBITDA, and EPS surpassing Wall Street's estimates. While revenue did decline 5% y/y due to softer demand, the real story here is margin expansion. Gross margins jumped to 56.7% from 50.9% last year, helping drive profitability gains. 

Adding to the positive momentum, next quarter's EPS guidance came in above analyst expectations, signaling continued strength ahead. Overall, despite some declining growth concerns, strong margins and profitability made this a solid quarter.

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What The Market Is Telling Us

FARO’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for FARO and indicate this news significantly impacted the market’s perception of the business.

FARO is up 21% since the beginning of the year, and at $31.50 per share, it is trading close to its 52-week high of $32.31 from January 2025. Investors who bought $1,000 worth of FARO’s shares 5 years ago would now be looking at an investment worth $545.34.

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