10 Worst 3D Printing and Additive Manufacturing Stocks To Buy

3. FARO Technologies (NASDAQ:FARO) 

Short % of Float: 8.80%  

Number of Hedge Fund Investors in Q2 2024: 20

FARO Technologies (NASDAQ:FARO) is an information technology company specializing in software-driven 3D measurement, imaging, and realization solutions. The company has established itself as a strong competitor in 3D printing and expanded its reach through strategic acquisitions.

FARO Technologies’ (NASDAQ:FARO) cloud-based Sphere platform has the potential to drive growth and increase profitability. The company’s recent launch of Sphere XG, a unified cloud platform that enables users to view and analyze 3D data, is a significant step forward in this strategy. Sphere XG allows users to combine 360° photos, 3D point clouds, and building information models (BIM) in one platform to provide a comprehensive solution for customers. The potential for Sphere XG to drive growth is significant. The market for 3D capture and virtual management tools is growing rapidly, driven by the increasing adoption of digital technologies in industrial sectors.

The company’s cost-cutting efforts have been successful, with non-GAAP operating expenses down 10% year-over-year (YoY) in Q4. This reduction in costs has helped to offset the decline in revenue, resulting in an adjusted EBITDA margin of 13.3%, a 2% YoY increase. The company’s free cash flow margin was approximately 15% in Q4, significantly improving from previous quarters. This increase in free cash flow results from the company’s focus on working capital efficiency the company expects to be cash flow positive in 2024, which will provide it with the flexibility to invest in growth initiatives and pursue strategic opportunities.

FARO Technologies (NASDAQ:FARO) is well-positioned to capitalize on the growing demand for 3D capture and virtual management tools. While 8.8% of the company’s shares are shorted, 20 hedge funds have maintained a bullish sentiment on the stock, with stakes worth $10.346 million as of the second quarter. Divisar Capital is the largest shareholder in the company, holding $29.42 million worth of stock as of June 30.