Financial Analysis: FARO Technologies (NASDAQ:FARO) vs. Hewlett Packard Enterprise (NYSE:HPE)

FARO Technologies (NASDAQ:FARO) and Hewlett Packard Enterprise (NYSE:HPE) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Profitability

This table compares FARO Technologies and Hewlett Packard Enterprise’s 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%
Hewlett Packard Enterprise	4.60%	9.59%	3.41%

Valuation & Earnings

This table compares FARO Technologies and Hewlett Packard Enterprise”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)	-879.80
Hewlett Packard Enterprise	$30.13 billion	0.91	$2.58 billion	$0.99	21.09

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for FARO Technologies and Hewlett Packard Enterprise, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FARO Technologies	0	2	0	0	2.00
Hewlett Packard Enterprise	0	10	6	2	2.56

FARO Technologies presently has a consensus target price of $35.50, indicating a potential downside of 19.30%. Hewlett Packard Enterprise has a consensus target price of $22.67, indicating a potential upside of 8.56%. Given Hewlett Packard Enterprise’s stronger consensus rating and higher possible upside, analysts plainly believe Hewlett Packard Enterprise is more favorable than FARO Technologies.

Risk & Volatility

FARO Technologies has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500. Comparatively, Hewlett Packard Enterprise has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Institutional & Insider Ownership

97.2% of FARO Technologies shares are owned by institutional investors. Comparatively, 80.8% of Hewlett Packard Enterprise shares are owned by institutional investors. 2.1% of FARO Technologies shares are owned by insiders. Comparatively, 0.4% of Hewlett Packard Enterprise shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Hewlett Packard Enterprise beats FARO Technologies on 11 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 Hewlett Packard Enterprise

Hewlett Packard Enterprise Company provides solutions that allow customers to capture, analyze, and act upon data seamlessly in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It operates in six segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments and Other. The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE Synergy; HPE Alletra, HPE GreenLake, Zerto, HPE InfoSight, and HPE CloudPhysics storage products; HPE Cray EX, HPE Cray XD, and converged edge systems; and HPE Superdome Flex, HPE Nonstop, and HPE Integrity products. It also provides HPE Aruba products that includes hardware products, such as Wi-Fi access points, switches, and gateways; HPE Aruba Networking software and services comprising cloud-based management, network management and access control, analytics and assurance, software-defined wide-area networking, network security, analytics and assurance, and location services software; and professional and support services, as well as as-a-service and consumption models. In addition, the company offers leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of various IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others; consultative-led services; HPE Ezmeral Container Platform; HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; OpsRamp; and Hewlett Packard Labs. It serves commercial and large enterprise groups, such as business and public sector enterprises; and through various partners comprising resellers, distribution partners, original equipment manufacturers, independent software vendors, systems integrators, and advisory firms. The company was founded in 1939 and is headquartered in Spring, Texas.