Cognex (CGNX) AI Stock Analysis

• Market Cap: $9.59B
• Dividend Yield: 0.89%
• Average Volume (3M): 2.30M
• Price to Earnings (P/E): 83.6
• Beta (1Y): 1.11
• Revenue Growth: 10.23%
• EPS Growth: 25.53%
• Country: US
• Employees: 2,914
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.27
• Shares Outstanding: 165,707,920
• 10 Day Avg. Volume: 3,524,737
• 30 Day Avg. Volume: 2,298,011
• PEG Ratio: 5.46
• Price to Book (P/B): 4.05
• Price to Sales (P/S): 6.08
• P/FCF Ratio: 25.54
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 9.46
• Enterprise Value/Gross Profit: 14.13
• Enterprise Value/Ebitda: 47.44
• 1Y Price Target: $60.71
• Price Target Upside: 7.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $65.00 ▲(15.11% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong financial resilience (low leverage and robust 2025 free cash flow) and upbeat earnings-call guidance targeting further margin expansion. Offsetting these positives are a stretched technical setup (overbought momentum) and a rich valuation (high P/E and low yield).

Positive Factors

Free cash flow strength

Cognex’s materially improved free cash flow and exceptionally high FCF conversion provide durable internal funding for R&D, buybacks, and debt-free flexibility. Strong cash generation underpins reinvestment in AI products and sustains capital returns without relying on external financing.

Conservative balance sheet & buybacks

A very low leverage profile and substantial net cash give Cognex high financial flexibility to pursue strategic investments, absorb cyclical shocks, and return capital. The enlarged buyback authorization signals management confidence and preserves optionality for long-term value creation.

AI-enabled product leadership

Ongoing launches of embedded AI and edge/cloud vision systems strengthen Cognex’s technology moat in industrial automation. Product leadership in a structurally growing served market supports sustainable revenue expansion and customer win rates over multiple cycles.

Negative Factors

Weaker returns vs prior peak

Despite recent revenue recovery, returns and net margins remain well below earlier peaks, indicating structural pressure on earnings power. Persistent lower ROE suggests tougher pricing, mix shifts, or competitive intensity that could constrain durable shareholder returns absent sustained margin restoration.

Portfolio exits may create mix headwinds

Removing low‑margin revenue can improve long‑term profitability but causes near‑term top‑line and mix volatility. The $22M exit reduces diversification in certain verticals and may depress 2026 reported growth and margins until higher‑margin sales scale to offset the lost volume.

End‑market softness & short‑cycle visibility

Cognex’s exposure to cyclical manufacturing end markets and uneven regional demand (notably automotive and parts of Asia) creates revenue timing risk. Short sales cycles amplify quarter‑to‑quarter variability and complicate forecasting, making sustained recovery dependent on broader industrial demand normalization.

Cognex Business Overview & Revenue Model

Company Description

Cognex 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 Money

Cognex generates revenue primarily through the sale of its machine vision products and software solutions. The company's revenue model is centered around the direct sale of hardware and software, as well as ongoing support and maintenance services. Key revenue streams include product sales, which contribute the majority of the company's income, and software licenses for its vision system products. Additionally, Cognex benefits from recurring revenue through maintenance contracts and service agreements that provide ongoing support to its customers. The company also engages in partnerships with other technology and manufacturing firms to enhance its product offerings and expand its market reach, further contributing to its earnings. Economic conditions, manufacturing trends, and demand for automation solutions play significant roles in influencing Cognex's revenue performance.

Cognex Financial Statement Overview

Summary

Fundamentals are high quality: strong and improving free cash flow in 2025 (FCF ~$237M) and a very conservative balance sheet with minimal leverage. The main drag is reduced earnings power versus 2020–2022, with net margins and ROE materially lower despite the revenue rebound in 2024–2025.

Income Statement

Revenue rebounded in 2024–2025 (about $838M in 2023 to $994M in 2025), but growth has been uneven over the cycle (declines in 2022–2023). Profitability remains solid with consistently high gross margins (~67–75%), though operating and net profitability have compressed meaningfully versus 2020–2022 (net margin ~11–12% in 2024–2025 vs ~21–27% in 2020–2022). Overall: strong pricing/quality of revenue, but weaker earnings power than a few years ago.

Balance Sheet

The balance sheet is conservatively positioned with very low leverage (debt-to-equity ~0.05 in 2025) and a large equity base (~$1.49B). Returns on equity are positive but have stepped down from peak levels (roughly ~20% in 2021 to ~7–8% in 2024–2025), signaling softer profitability rather than balance-sheet stress. Overall: high financial flexibility, with the main watch item being reduced returns.

Cash Flow

Cash generation is strong and improved sharply in 2025: operating cash flow rose to ~$246M and free cash flow to ~$237M, with free cash flow growth accelerating versus prior years. Cash conversion is generally healthy, with free cash flow close to net income across years (around ~0.80–0.96x). One weakness is that cash flow coverage of net income dipped below 1.0x in 2023–2024 before recovering in 2025, indicating some volatility in cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	994.36M	914.51M	837.55M	1.01B	1.04B
Gross Profit	665.39M	625.79M	601.24M	721.90M	759.83M
EBITDA	193.36M	147.75M	144.58M	288.29M	335.38M
Net Income	114.44M	106.17M	113.23M	215.53M	279.88M
Balance Sheet
Total Assets	2.02B	1.99B	2.02B	1.96B	2.00B
Cash, Cash Equivalents and Short-Term Investments	262.93M	246.05M	332.05M	400.13M	323.62M
Total Debt	76.59M	70.22M	78.60M	39.75M	25.58M
Total Liabilities	524.65M	475.35M	513.06M	519.75M	573.57M
Stockholders Equity	1.49B	1.52B	1.50B	1.44B	1.43B
Cash Flow
Free Cash Flow	236.77M	134.04M	89.84M	223.74M	298.61M
Operating Cash Flow	245.51M	149.08M	112.92M	243.41M	314.06M
Investing Cash Flow	28.02M	-38.97M	32.27M	-4.45M	-252.54M
Financing Cash Flow	-206.69M	-118.42M	-125.61M	-240.37M	-141.62M

Cognex Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CGNX, the sentiment is Positive. The current price of 56.47 is above the 20-day moving average (MA) of 47.37, above the 50-day MA of 41.68, and above the 200-day MA of 39.20, indicating a bullish trend. The MACD of 4.90 indicates Negative momentum. The RSI at 77.53 is Negative, neither overbought nor oversold. The STOCH value of 82.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CGNX.

Cognex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNT	73 Outperform	$5.80B	14.67	35.39%	0.26%	1.76%	4.10%
CGNX	71 Outperform	$9.59B	83.57	7.61%	0.89%	10.23%	25.53%
BMI	71 Outperform	$4.62B	32.61	21.47%	0.82%	12.11%	16.45%
SANM	71 Outperform	$8.64B	37.84	9.74%	―	7.40%	13.79%
ITRI	69 Neutral	$4.40B	15.04	19.38%	―	0.14%	14.12%
MKSI	69 Neutral	$16.89B	58.06	11.74%	0.54%	8.13%	780.20%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Cognex Corporate Events

Cognex Announces Board Refresh to Drive AI Growth

On February 11, 2026, Cognex Corporation’s board appointed automation veteran Dr. Sami Atiya and enterprise sales executive Chris Donato as directors, effective March 2, 2026, with Atiya’s term running to the 2028 shareholder meeting and Donato’s to the 2026 meeting. Atiya will join the Nominating, Governance and Sustainability Committee and Donato the Compensation Committee, with both receiving standard cash retainers, committee fees, and initial restricted stock unit awards under Cognex’s 2023 equity plan.

Announced publicly on February 17, 2026, the board refresh follows an extensive search and coincides with the March 2, 2026 retirement of former CEO Robert Willett and long‑time director Dr. Dianne Parrotte, bringing to six the number of independent directors added since 2021. Cognex’s leadership emphasized that Atiya’s three decades in automation, robotics, AI and medical technology, together with Donato’s 25‑year track record in enterprise software sales, are intended to support the company’s strategic push to lead AI‑powered industrial machine vision, enhance customer experience and drive its next phase of profitable growth.

The most recent analyst rating on (CGNX) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Cognex stock, see the CGNX Stock Forecast page.

Cognex Delivers Profitable Growth and Boosts Shareholder Returns

On February 11, 2026, Cognex reported that fourth‑quarter 2025 revenue rose 10% year on year to $252 million, with constant‑currency growth of 9%, while full‑year revenue increased 9% and adjusted EPS climbed 38%, marking a return to profitable growth. The company expanded adjusted EBITDA margins for a sixth consecutive quarter, exited about $22 million of non‑core, low‑growth or low‑margin business, and outlined further operating model optimization to sharpen its portfolio mix, support continued investment in AI technologies, and sustain margin expansion as it targets higher profitability by the end of 2026.

Also on February 11, 2026, Cognex’s board declared a quarterly cash dividend of $0.085 per share, payable March 12, 2026, to shareholders of record on February 26, 2026. The board further authorized an additional $500 million share repurchase program and reauthorized use of Rule 10b5‑1 trading plans, underscoring management’s confidence in the company’s earnings power and its commitment to returning capital to shareholders while pursuing cost reductions and growth initiatives.

The most recent analyst rating on (CGNX) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Cognex stock, see the CGNX Stock Forecast page.