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Cognex (CGNX)
:CGNX
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Cognex
(NASDAQ:CGNX)
62Neutral
Positive Factors
Logistics Growth
Logistics registered 20% growth in 2024, driven in part by recovering demand from its historically large e-commerce customer.
R&D Investment
The company invests approximately 14% of revenue in R&D, funding organic growth opportunities and addressing challenging vision applications.
Solid Q4 Results
Q4 results were solid, beating consensus on all major metrics.
Negative Factors
Growth Target Challenges
6 of 7 years post 2017 have been below the 15% growth target.
High Valuation Risk
The multiple over 40x forward earnings could be at serious risk.
Weak Automotive Market
CGNX faces ongoing weakness in Automotive, its second-largest end market.
Cognex (CGNX) vs. S&P 500 (SPY)
Market Cap
$5.21B
Dividend Yield0.99%
Average Volume (3M)2.21M
Price to Earnings (P/E)50.9
Beta (1Y)1.43
Revenue Growth9.19%
EPS Growth-5.77%
CountryUS
Employees2,914
SectorTechnology
Sector Strength46
IndustryHardware & Equipment
Share Statistics
EPS (TTM)0.61
Shares Outstanding169,370,130
10 Day Avg. Volume2,667,372
30 Day Avg. Volume2,213,396
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.74
Price to Cash Flow (P/CF)25.50
P/FCF Ratio25.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.70Price Target Upside35.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Cognex Business Overview & Revenue Model
Company DescriptionCognex Corporation provides machine vision products that capture and analyze visual information in order to automate manufacturing and distribution tasks worldwide. Its machine vision products are used to automate the manufacturing and tracking of discrete items, including mobile phones, aspirin bottles, and automobile tires by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. The company offers VisionPro software, a suite of patented vision tools for advanced programming; QuickBuild that allows customers to build vision applications with a graphical, flowchart-based programming interface; and Cognex deep learning vision software. It also provides a range of inspection tasks, including part location, identification, measurement, assembly verification, and robotic guidance; vision sensors for vision applications, such as checking the presence and size of parts; and the In-Sight product line of vision systems and sensors. In addition, the company offers DataMan, an image-based barcode readers and barcode verifiers. It sells its products to consumer electronics, automotive, consumer products, food and beverage, pharmaceuticals, and medical devices industries, as well as through a network of distributors and integrators. Cognex Corporation was incorporated in 1981 and is headquartered in Natick, Massachusetts.
How the Company Makes MoneyCognex makes money primarily through the sale of its machine vision products and solutions. The company's revenue streams are largely derived from product sales, which include vision systems, vision software, and vision sensors. These products are sold directly to manufacturers or through a network of distributors and integrators. Additionally, Cognex offers support and maintenance services, which provide a recurring revenue stream. The company leverages significant partnerships with system integrators and OEMs (Original Equipment Manufacturers) to expand its market reach. Cognex's revenue is also influenced by its continuous investment in research and development, enabling it to innovate and maintain a competitive edge in the rapidly evolving machine vision industry.
Cognex Financial Statement Overview
Summary
Cognex exhibits strong financial fundamentals with solid revenue growth, a healthy balance sheet characterized by low leverage, and robust cash flow generation. While profitability margins have faced some pressure, the company's financial position remains stable, supported by strong equity and cash reserves. Continued focus on cost management and profitability improvement could enhance financial performance.Income Statement
Cognex has experienced a healthy revenue growth rate of 9.17% from 2023 to 2024. However, the gross profit margin has slightly declined from 71.79% in 2023 to 68.43% in 2024, indicating increased cost pressures. The net profit margin also decreased from 13.52% in 2023 to 11.61% in 2024, reflecting a reduction in profitability. Despite these challenges, the company maintains a stable EBIT margin of 12.58% and EBITDA margin of 12.58% in 2024, though both are lower compared to prior years.70
Positive
Balance Sheet
Cognex's balance sheet demonstrates strong financial health with a low debt-to-equity ratio of 0.05. The equity ratio remains robust at 76.18%, indicating a solid capital structure. Although the return on equity (ROE) has decreased to 7.00% in 2024 from 7.53% in 2023, it still reflects efficient use of shareholder funds. The company maintains a strong liquidity position with considerable cash reserves.80
Positive
Cash Flow
Cognex shows a significant improvement in free cash flow, increasing by 49.17% from 2023 to 2024. The operating cash flow to net income ratio is 1.40, indicating healthy cash flow generation relative to net income. However, the free cash flow to net income ratio of 1.26 suggests that a considerable portion of net income is being converted to free cash flow, which is positive for financial flexibility.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 914.51M | 837.55M | 1.01B | 1.04B | 811.02M |
| Gross Profit | ||||
| 625.79M | 601.24M | 721.90M | 759.83M | 604.60M |
| EBIT | ||||
| 115.06M | 130.70M | 246.23M | 315.10M | 170.53M |
| EBITDA | ||||
| 115.06M | 144.58M | 288.29M | 335.38M | 232.53M |
| Net Income Common Stockholders | ||||
| 106.17M | 113.23M | 215.53M | 279.88M | 176.19M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 186.09M | 332.05M | 854.25M | 907.36M | 372.31M |
| Total Assets | ||||
| 1.99B | 2.02B | 1.96B | 2.00B | 1.80B |
| Total Debt | ||||
| 70.22M | 78.60M | 48.21M | 25.58M | 26.23M |
| Net Debt | ||||
| -115.88M | -124.05M | -806.04M | -881.78M | -242.84M |
| Total Liabilities | ||||
| 475.35M | 513.06M | 519.75M | 573.57M | 538.50M |
| Stockholders Equity | ||||
| 1.52B | 1.50B | 1.44B | 1.43B | 1.26B |
| Cash Flow | Free Cash Flow | |||
| 134.04M | 89.84M | 223.74M | 298.61M | 229.10M |
| Operating Cash Flow | ||||
| 149.08M | 112.92M | 243.41M | 314.06M | 242.40M |
| Investing Cash Flow | ||||
| -38.97M | 32.27M | -4.45M | -252.54M | 169.44M |
| Financing Cash Flow | ||||
| -118.42M | -125.61M | -240.37M | -141.62M | -316.87M |
Cognex Technical Analysis
Negative
30.74
Price Trends
35.08
Negative
36.81
Negative
39.51
Negative
Market Momentum
-0.99
Negative
38.09
Neutral
36.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CGNX, the sentiment is Negative. The current price of 30.74 is below the 20-day moving average (MA) of 31.80, below the 50-day MA of 35.08, and below the 200-day MA of 39.51, indicating a bearish trend. The MACD of -0.99 indicates Negative momentum. The RSI at 38.09 is Neutral, neither overbought nor oversold. The STOCH value of 36.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CGNX.
Cognex Risk Analysis
Cognex disclosed 23 risk factors in its most recent earnings report. Cognex reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cognex Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $27.47B | 30.11 | 8.14% | 1.32% | -10.71% | -7.39% | |
76 Outperform | $119.98B | 19.71 | 35.19% | 1.06% | 4.45% | -10.01% | |
73 Outperform | $181.97B | 79.19 | 15.62% | ― | 17.24% | 27.76% | |
73 Outperform | $13.86B | 26.50 | 20.29% | 0.55% | 5.52% | 16.59% | |
69 Neutral | $30.31B | 33.51 | 26.22% | 1.90% | -11.28% | -23.69% | |
62 Neutral | $5.21B | 50.85 | 7.03% | 0.99% | 9.19% | -5.77% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% |
* Technology Sector Average
Performance Comparison
CGNX
Cognex
30.74
-10.68
-25.78%
AMAT
Applied Materials
147.68
-59.27
-28.64%
ISRG
Intuitive Surgical
507.90
113.03
28.62%
ROK
Rockwell Automation
268.08
-10.09
-3.63%
TER
Teradyne
85.68
-26.82
-23.84%
FANUY
Fanuc
14.67
0.48
3.38%
Cognex Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -21.50% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Cognex's earnings call highlighted significant achievements in AI product expansion, sales transformation, and logistics revenue growth. However, challenges in the automotive and consumer electronics markets, along with pricing pressure in China, offset some of these gains.Highlights
AI-Enabled Product Expansion
Cognex introduced the industry's first AI-enabled 3D smart camera, the In-Sight L38, and expanded the modular vision tunnel portfolio with the DataMan 380 barcode reader.
Successful Sales Transformation
The new sales team acquired over 3,000 new customers in 2024, contributing significantly to bookings and expanding customer base.
Logistics Revenue Growth
Logistics revenue grew 20% in 2024, driven by global e-commerce leaders and regional players, with significant momentum in logistics and semiconductor sectors.
Strong Financial Performance in Q4
Fourth quarter revenue of $230 million increased by 17% year-on-year, with adjusted EBITDA margin at 18.5%, driven by revenue growth and cost management.
Successful Integration of Moritex
The acquisition of Moritex was accretive to adjusted EPS in 2024, contributing to a 9% overall revenue growth for the year.
Lowlights
Automotive Revenue Decline
Automotive revenue was down 14% year-on-year due to declines in EV battery investment and tentativeness in large capital projects.
Consumer Electronics Weakness
Revenue in consumer electronics declined 5% year-on-year, impacted by limited smartphone design changes and conservative CapEx spending.
China Market Challenges
Despite some growth in China, the market remains uncertain with significant competitive pressure and cautious outlook.
Pricing Pressure
Pricing headwinds were noted, particularly in China, affecting gross margins and contributing to a decline in adjusted gross margin to 69.3% for 2024.
Company Guidance
During the Cognex Fourth Quarter and Full Year 2024 Earnings Conference Call, the company provided guidance and key metrics for the upcoming period. For the first quarter of 2025, Cognex expects revenue to be between $200 million and $220 million, with projected adjusted gross margins to remain in the high 60% range. The anticipated adjusted EBITDA margin is forecasted between 12% and 15%, which reflects a year-over-year increase of 150 basis points due to operating leverage and disciplined operating expense management. The call also highlighted a mixed macroeconomic environment, with expectations for continued growth in logistics and semiconductor sectors, but ongoing weakness in the automotive market and a $5 million foreign exchange headwind. The guidance underscores Cognex's strategic focus on expanding AI integration across its product line and executing its sales transformation initiatives.Cognex Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Cognex Appoints New President Amid Leadership Restructure
Neutral
Feb 20, 2025
On February 20, 2025, Cognex Corporation appointed Matthew Moschner as the new President and Chief Operating Officer, succeeding Robert Willett in the presidential role. This leadership change involves Mr. Moschner overseeing global engineering, products, sales, and operations, after successfully managing key roles and integrations, including the significant acquisition of Moritex in 2023. Alongside this appointment, the Cognex Board amended its by-laws to allow the roles of CEO and President to be held by separate individuals, marking a strategic shift in its executive structure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.