11 Best Lidar Stocks to Buy According to Hedge Funds

3. FARO Technologies, Inc. (NASDAQ:FARO)

Number of Hedge Fund Holders: 17

FARO Technologies, Inc. (NASDAQ:FARO) is one of the few companies in a young industry. It provides 3D measurement and imaging solutions for industries like manufacturing and construction. Its technology is a core component of Lidar systems that power many self-driving vehicles across North America and China.

In Q3 2024, the company reported revenue at the upper end of the guidance range, at $82.6 million. At the same time, non-GAAP gross margin was 56.1%—the highest quarterly level since 2019. The adjusted EBITDA was $8.9 million, approximately 11% of sales, and the non-GAAP earnings per share came in at $0.21. The EPS beat analyst expectations by $0.18.

Although the revenue in the latest quarter is down almost 5% year over year, FARO Technologies, Inc.’s (NASDAQ:FARO) financial situation is solid. For example, EPS, as noted earlier, is up 950%, only second to EBITDA, which grew 994% from Q2 2024. And the market is noticing. The stock declined most of 2024 but turned around late in the year. Right now, it has gained 37% in the past 12 months and 88% in the past six months.

The solid financial performance is due to several strategic decisions the company has made recently. For example, FARO Technologies, Inc. (NASDAQ:FARO) launched the new FARO Leap ST handheld scanner in late January. The scanner has five operating modes, including ultra-fast scanning and photogrammetry.

The launch came after FARO Technologies signed a 6-figure licensing deal with Royal BAM Group. Royal BAM Group is the largest construction company in the Netherlands, and it obtained the license to use Sphere XG software, one of FARO Technologies’ leading products. During the latest earnings call, Peter Lau, CEO of FARO, said with regard to this product: “Our Sphere XG offering since we launched it last year in Q4 has been a tailwind for us. It’s being adopted fairly regularly by our customers and not just customers that buy software only, but customers that buy software as a part of our hardware solutions.” In a recent report, Craig-Hallum’s Greg Palm maintained a “Buy” rating on the company’s stock with a price target of $36.