Cognex (CGNX) AI Stock Analysis

• Market Cap: $4.06B
• Dividend Yield: 1.29%
• Average Volume (3M): 2.98M
• Price to Earnings (P/E): 39.0
• Beta (1Y): 1.36
• Revenue Growth: 9.19%
• EPS Growth: -5.77%
• Country: US
• Employees: 2,914
• Sector: Technology
• Sector Strength: 55
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.61
• Shares Outstanding: 169,370,130
• 10 Day Avg. Volume: 4,378,224
• 30 Day Avg. Volume: 2,980,637
• PEG Ratio: N/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 Ratio: 25.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $38.64
• Price Target Upside: 64.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Cognex's strong financial performance and positive developments in AI product expansion and logistics revenue growth are key strengths. However, the stock's bearish trend, high valuation, and challenges in specific markets such as automotive and China present notable risks. These factors collectively result in a moderate overall stock score.

Positive Factors

Financial Performance

Q4 results were solid, beating consensus on all major metrics.

Market Growth

Logistics registered 20% growth in 2024, driven in part by recovering demand from its historically large e-commerce customer.

Technology and Innovation

Potential for new AI-enabled machine vision tools is expected to be discussed at the Investor Day.

Negative Factors

Automotive Market Weakness

CGNX faces ongoing weakness in Automotive, its second-largest end market.

Growth Challenges

6 of 7 years post 2017 have been below the 15% growth target.

Market Uncertainty

Uncertainty in broader factory automation market.

Cognex Business Overview & Revenue Model

Company Description

Cognex Corporation (CGNX) is a leading provider of vision systems, vision software, vision sensors, and surface inspection systems used in manufacturing automation. The company operates primarily in the machine vision technology sector, delivering products that are essential for quality assurance and process control in industries such as automotive, consumer electronics, logistics, and food and beverage. Cognex's core products help manufacturers improve efficiency, enhance product quality, and reduce production costs by enabling machines to 'see' and make decisions during the manufacturing process.

How the Company Makes Money

Cognex 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 23.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 23.55 is below the 20-day moving average (MA) of 27.61, below the 50-day MA of 31.32, and below the 200-day MA of 38.12, indicating a bearish trend. The MACD of -2.36 indicates Positive momentum. The RSI at 31.43 is Neutral, neither overbought nor oversold. The STOCH value of 22.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CGNX.

Cognex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESE	80 Outperform	$3.94B	35.84	9.22%	0.21%	8.94%	18.56%
ITRI	77 Outperform	$4.65B	19.62	17.70%	―	12.29%	147.67%
MKSI	69 Neutral	$4.53B	23.90	7.93%	1.31%	-0.99%	―
NOVT	68 Neutral	$4.10B	64.27	9.03%	―	7.67%	-12.33%
CGNX	63 Neutral	$4.06B	39.02	7.03%	1.29%	9.19%	-5.77%
VNT	63 Neutral	$4.48B	11.01	43.49%	0.33%	-3.75%	13.76%
Sector *	58 Neutral	$11.04B	9.83	-6.56%	3.16%	7.59%	-10.43%

Cognex Corporate Events

Cognex Appoints New President Amid Leadership Restructure

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.