Cognex (CGNX) AI Stock Analysis

• Market Cap: $5.28B
• Dividend Yield: 1%
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 46.0
• Beta (1Y): 1.42
• Revenue Growth: 8.56%
• EPS Growth: 18.99%
• Country: US
• Employees: 2,914
• Sector: Technology
• Sector Strength: 84
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.16
• Shares Outstanding: 167,864,780
• 10 Day Avg. Volume: 1,659,311
• 30 Day Avg. Volume: 1,594,736
• PEG Ratio: 3.77
• Price to Book (P/B): 3.47
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.60
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 1.38
• Enterprise Value/Gross Profit: 7.80
• Enterprise Value/Ebitda: 8.73
• 1Y Price Target: $37.40
• Price Target Upside: 16.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 68 Neutral
• Price Target: $33.00 ▲(2.96%Upside)

Cognex's strong financial stability and strategic initiatives in AI and logistics are positive drivers. However, high valuation metrics, mixed technical indicators, and challenges in key markets like automotive and China weigh on the overall score.

Positive Factors

Market Expansion

CGNX aims to double its customer base in the next five years by leveraging expanded AI capabilities and an updated go-to-market strategy.

Strategic Leadership

The transition of CEO Rob Willett to Matt Moschner suggests confidence in the company’s leadership and future direction.

Technological Advancements

CGNX has best-in-class machine vision technology, positioning it strongly in a competitive industry.

Negative Factors

Earnings Performance

CGNX needs to prove the case of long-term earnings compounding, which has not been the case so far and won't be solved near-term.

Financial Framework

The long-term growth framework will almost certainly be lowered, with expectations moving from 15% to 10%.

Growth Targets

The long-term targets were revised down, and the 10-11% organic growth target remains ambitious.

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 predominantly in the industrial manufacturing and logistics sectors, offering advanced machine vision technology that enables computers to emulate human vision in order to automate tasks. Cognex's core products provide solutions for quality inspection, robot guidance, and product tracking across various industries, including automotive, electronics, consumer products, and logistics.

How the Company Makes Money

Cognex makes money primarily through the sale of its machine vision systems and software products. The company's revenue model centers around the direct sales of its hardware and software solutions to manufacturers and logistics companies seeking to automate their production and distribution processes. Key revenue streams include sales of vision systems that are used for tasks like automated quality inspection and barcode reading. Cognex also generates income from software licenses, maintenance services, and training programs. Significant partnerships with major integrators and OEMs (Original Equipment Manufacturers) further enhance their market reach and contribute to earnings. The company's ability to innovate and develop cutting-edge vision technology is a critical factor in maintaining its competitive advantage and driving revenue growth.

Cognex Financial Statement Overview

Summary

Cognex shows strong financial stability with a solid equity ratio and low leverage. While revenue growth is modest, operational margins remain healthy. The company exhibits effective cash flow management, although challenges in sustaining high profitability and growth are notable.

Income Statement

Cognex's TTM (Trailing-Twelve-Months) revenue showed a modest growth of 0.57% from the previous year, indicating relative stability in revenue generation. The TTM gross profit margin stands strong at approximately 68.3%, reflecting the company's efficiency in managing production costs. However, the net profit margin of 12.81% in the TTM indicates a decline from previous years, suggesting increasing operational costs or other expenses impacting profitability. The EBIT and EBITDA margins are relatively healthy at 13.80% and 17.01% respectively, underscoring a solid operational performance despite the revenue challenges.

Balance Sheet

The company's balance sheet reflects a robust equity position with a strong equity ratio of 74.8% in the TTM, signifying financial stability. The debt-to-equity ratio is low at 0.05, indicating low leverage and a conservative approach to financing. Return on Equity (ROE) for the TTM is approximately 8.14%, which, while decent, shows a downward trend compared to previous years, suggesting moderate efficiency in using shareholder equity to generate profits.

Cash Flow

Cognex's TTM free cash flow grew by 21.23%, showcasing significant improvement in cash generation capabilities. The operating cash flow to net income ratio of 1.49 reflects efficient cash conversion from earnings. The free cash flow to net income ratio of 1.38 indicates strong cash flow relative to net income, suggesting effective management of operational cash needs. However, a drop in operating cash flow compared to prior years may indicate potential challenges in sustaining cash generation levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	919.75M	914.51M	837.55M	1.01B	1.04B	811.02M
Gross Profit	628.18M	625.79M	601.24M	721.90M	759.83M	604.60M
EBITDA	164.44M	147.75M	144.58M	288.29M	335.38M	232.53M
Net Income	117.75M	106.17M	113.23M	215.53M	279.88M	176.19M
Balance Sheet
Total Assets	1.93B	1.99B	2.02B	1.96B	2.00B	1.80B
Cash, Cash Equivalents and Short-Term Investments	200.45M	246.05M	332.05M	854.25M	907.36M	372.31M
Total Debt	73.70M	70.22M	78.60M	48.21M	25.58M	26.23M
Total Liabilities	486.88M	475.35M	513.06M	519.75M	573.57M	538.50M
Stockholders Equity	1.45B	1.52B	1.50B	1.44B	1.43B	1.26B
Cash Flow
Free Cash Flow	162.46M	134.04M	89.84M	223.74M	298.61M	229.10M
Operating Cash Flow	175.94M	149.08M	112.92M	243.41M	314.06M	242.40M
Investing Cash Flow	43.14M	-38.97M	32.27M	-4.45M	-252.54M	169.44M
Financing Cash Flow	-211.70M	-118.42M	-125.61M	-240.37M	-141.62M	-316.87M

Cognex Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• 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 32.05 is above the 20-day moving average (MA) of 30.77, above the 50-day MA of 29.74, and below the 200-day MA of 34.53, indicating a neutral trend. The MACD of 0.57 indicates Negative momentum. The RSI at 67.74 is Neutral, neither overbought nor oversold. The STOCH value of 87.79 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	75 Outperform	$5.54B	15.26	35.88%	0.27%	-3.59%	-11.30%
ESE	74 Outperform	$4.93B	41.79	9.66%	0.17%	8.40%	20.03%
ITRI	74 Outperform	$6.04B	24.17	17.73%	―	7.10%	58.52%
MKSI	74 Outperform	$6.76B	30.02	9.50%	0.87%	-1.14%	―
NOVT	71 Outperform	$4.71B	66.92	9.73%	―	6.52%	1.60%
CGNX	68 Neutral	$5.28B	46.01	8.02%	1.00%	8.56%	18.99%
Sector *	63 Neutral	$33.24B	5.92	-11.55%	1.90%	5.54%	-20.14%

Cognex Corporate Events

Cognex Reports Q1 2025 Financial Results

On April 30, 2025, Cognex Corporation announced its financial results for the first quarter of 2025, reporting a 2% increase in revenue year-on-year, or 5% on a constant-currency basis, driven by its logistics and semiconductor businesses. The company also declared a quarterly cash dividend of $0.08 per share and announced a CEO transition, with Matt Moschner set to succeed Robert J. Willett as CEO on June 27, 2025. Despite economic uncertainties and a downturn in the automotive market, Cognex maintained strong financial performance with a significant increase in operating income and net income per diluted share compared to the previous year.