Winners And Losers Of Q2: FARO (NASDAQ:FARO) Vs The Rest Of The Inspection Instruments Stocks

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at FARO (NASDAQ:FARO) and the best and worst performers in the inspection instruments industry.

Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.

The 7 inspection instruments stocks we track reported a decent Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.5% below.

Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Luckily, inspection instruments stocks have performed well with share prices up 12.8% on average since the latest earnings results.

FARO (NASDAQ:FARO)

Launched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.

FARO reported revenues of $82.09 million, down 6.9% year on year. This print fell short of analysts’ expectations by 1.9%. Overall, it was a weaker quarter for the company with revenue guidance for next quarter missing analysts’ expectations.

"As I reflect on the completion of my first year at FARO, I am pleased with the execution of the first phase of our journey to drive operational excellence and we are pacing well ahead of our expectations," said Peter Lau, President & Chief Executive Officer.

FARO delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 20.2% since reporting and currently trades at $17.35.

Read our full report on FARO here, it’s free.

Best Q2: Badger Meter (NYSE:BMI)

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Badger Meter reported revenues of $216.7 million, up 23.2% year on year, outperforming analysts’ expectations by 6.5%. It was a stunning quarter for the company with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

Badger Meter achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.7% since reporting. It currently trades at $197.47.

Is now the time to buy Badger Meter? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Mirion (NYSE:MIR)

With its monitoring devices installed on spacecraft, Mirion (NYSE:MIR) offers radiation technology to government agencies, healthcare providers, and industrial companies.

Mirion reported revenues of $207.1 million, up 5% year on year, falling short of analysts’ expectations by 1.7%. It was a weak quarter for the company with some shareholders hoping for a better result.

As expected, the stock is down 2.4% since the results and currently trades at $10.05.

Read our full analysis of Mirion’s results here.

Keysight (NYSE:KEYS)

Spun off from Hewlett-Packard in 2014, Keysight (NYSE:KEYS) offers electronic measurement products for use in various sectors.

Keysight reported revenues of $1.22 billion, down 11.9% year on year, surpassing analysts’ expectations by 1.9%. Taking a step back, it was a very strong quarter for the company with a solid beat of analysts’ earnings estimates.

Keysight had the slowest revenue growth among its peers. The stock is up 6.8% since reporting and currently trades at $147.94.

Read our full, actionable report on Keysight here, it’s free.

Iteris (NASDAQ:ITI)

Originally serving as a business incubator for technology companies, Iteris (NASDAQ:ITI) provides applied informatics for transportation and agriculture.

Iteris reported revenues of $45.78 million, up 5.1% year on year, surpassing analysts’ expectations by 3.6%. Zooming out, it was a mixed quarter for the company with full-year revenue guidance beating analysts’ expectations but a miss of analysts’ earnings estimates.

Iteris delivered the highest full-year guidance raise among its peers. The stock is up 64.3% since reporting and currently trades at $7.03.

Read our full, actionable report on Iteris here, it’s free.

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