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What: FARO Technologies
So what: Baird also raised its target price on FARO to $48 from $40, citing first-quarter order strength. New order bookings in the first quarter grew 41% year over year, while revenue grew 24%. In the first-quarter earnings release, management expressed optimism regarding 2011, including expectations that good operating leverage will continue.
Now what: Wednesday after the close, FARO reported first-quarter EPS grew 54% year over year but was a penny shy of the $0.21 consensus estimate. On Thursday, the stock closed down 4% after falling close to 10% in intraday trading. Baird's upgrade appears to be turning investor focus from the earnings disappointment to new order growth and perhaps strong EPS growth and management confidence in the outlook.
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Fool contributor Cindy Johnson owns no shares of any company named above. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.