FARO Technologies (NASDAQ:FARO) & International Business Machines (NYSE:IBM) Head-To-Head Comparison

FARO Technologies (NASDAQ:FARO) and International Business Machines (NYSE:IBM) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares FARO Technologies and International Business Machines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FARO Technologies	-0.26%	-0.35%	-0.18%
International Business Machines	8.71%	37.43%	7.00%

Institutional & Insider Ownership

97.2% of FARO Technologies shares are owned by institutional investors. Comparatively, 59.0% of International Business Machines shares are owned by institutional investors. 2.4% of FARO Technologies shares are owned by insiders. Comparatively, 0.2% of International Business Machines shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares FARO Technologies and International Business Machines”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FARO Technologies	$342.43 million	2.48	-$9.07 million	($0.05)	-878.80
International Business Machines	$62.83 billion	4.19	$6.02 billion	$5.81	48.77

International Business Machines has higher revenue and earnings than FARO Technologies. FARO Technologies is trading at a lower price-to-earnings ratio than International Business Machines, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for FARO Technologies and International Business Machines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FARO Technologies	0	2	0	0	2.00
International Business Machines	1	8	8	2	2.58

FARO Technologies currently has a consensus price target of $35.50, indicating a potential downside of 19.21%. International Business Machines has a consensus price target of $259.06, indicating a potential downside of 8.57%. Given International Business Machines’ stronger consensus rating and higher probable upside, analysts plainly believe International Business Machines is more favorable than FARO Technologies.

Risk & Volatility

FARO Technologies has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

International Business Machines beats FARO Technologies on 12 of the 15 factors compared between the two stocks.

About FARO Technologies

FARO Technologies, Inc. designs, develops, manufactures, markets, and supports software driven three-dimensional measurement, imaging, and realization solutions worldwide. The company offers FaroArm, a combination of a portable articulated measurement arm, a computer, and CAM2 software programs; FARO Laser Tracker, a combination of a portable large-volume laser measurement tool, a computer, and CAM2 software programs; FARO Laser Projector, which provides a virtual template that operators and assemblers can use to position components; FARO Laser Scanning Portfolio to measure and collect a cloud of data points for 3D rendering of an object or area; and FARO Mobile Laser Portfolio provides 3D scanning while attached to other mobile devices, such as drones for metrology, reverse engineering, factory automation, building information modeling, public safety, and other applications. It also provides FARO Software, a software solution that integrate with FARO hardware products to merge data and provide collaborative workflows and applications. It sells its products to automotive, aerospace, and metal and machine fabrication industries. FARO Technologies, Inc. was founded in 1981 and is headquartered in Lake Mary, Florida.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.