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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CGNX

Cognex Corporation's recent performance was impacted by several factors. Despite beating earnings estimates with Q3 earnings of $0.33 per share, the company's growth prospects are being closely monitored. Institutional investors such as US Bancorp DE and Stephens Inc. AR have reduced their holdings, with decreases of 6.3% and 15.1%, respectively. Additionally, Engaged Capital has taken a stake in the company, highlighting opportunities for value enhancement, including margin expansion. The company's participation in upcoming investor conferences may also influence its performance.

1.c. Company Highlights

2. Cognex's Strong Q3 2025 Earnings: A Closer Look

Cognex reported a robust third quarter, with revenue growth of 18% year-over-year, or 16% on a constant currency basis, driven by strong demand across various end markets. The company's adjusted EBITDA margin expanded 450 basis points year-over-year to 22.1%, and adjusted EPS increased 69% to $0.33, beating estimates of $0.27. The company's trailing 12-month free cash flow conversion was 133%, indicating strong cash generation capabilities.

Publication Date: Nov -02

📋 Highlights
  • Q3 Revenue Growth & EBITDA Margin:: 13% constant currency revenue growth; adjusted EBITDA margin of 22.1%, up 450 bps YoY.
  • Adjusted EPS Surge:: Adjusted EPS rose 47% YoY to $0.33, with 69% growth reported.
  • Q4 Revenue Guidance:: $230–245M (3% growth at midpoint), 17–20% EBITDA margin, and $0.19–0.24 EPS guidance.
  • China Market Recovery:: 9% growth in Q3 driven by localized investments; pricing stability and competitive dynamics improving.
  • Logistics Innovation:: Launched SLX product line to address logistics automation, targeting warehouse vision inspection expansion.

Segment Performance

Cognex's growth was driven by various end markets, including consumer electronics, logistics, and semiconductor. The company saw 9% growth in China, driven by investments in localization, distribution, sales channels, and local engineering. In logistics, the company is driving productivity in existing facilities and sees room for growth, particularly with its recent product release, SLX, which brings vision and visual inspection to warehouses.

Guidance and Outlook

Cognex expects revenue to be between $230 million and $245 million in Q4, representing growth of approximately 3% at the midpoint. Adjusted EBITDA margin is expected to be between 17% and 20%, and adjusted earnings per share are expected to be between $0.19 and $0.24. The company is cautious about Europe, with PMIs improving but remaining near neutral levels, and expects similar growth trends excluding the commercial partnership in 2026.

Valuation and Growth Expectations

With a P/E Ratio of 63.26 and an EV/EBITDA of 37.47, Cognex's valuation suggests that the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 7.9%. While Cognex's growth prospects are promising, its valuation multiples indicate that the stock may be sensitive to any misses in expectations. The company's ROE of 7.39% and ROIC of 5.41% indicate a relatively efficient use of capital.

Strategic Initiatives

Cognex is making progress in executing its sales force transformation and advancing AI technology leadership. The company is also investing in localization and distribution in China, which is driving growth. As Matt Moschner mentioned, "We're innovating with new tools and educating the market on the benefits of vision," which is driving growth in packaging, logistics, and consumer electronics.

3. NewsRoom

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Cognex Corporation (CGNX) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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Here Are Wednesday’s Top Wall Street Analyst Upgrades and Downgrades: American Eagle Outfitters, Equinix, Garmin, Honeywell, Uber, Wendy’s and More

Dec -03

Source: 247wallst.com

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Cognex Announces Participation at Upcoming Investor Conferences

Dec -01

Source: prnewswire.com

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Creative Planning Buys 20,587 Shares of Cognex Corporation $CGNX

Nov -26

Source: defenseworld.net

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Cognex Corporation (CGNX) Presents at Stephens Annual Investment Conference 2025 Transcript

Nov -19

Source: seekingalpha.com

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Cognex Corporation (CGNX) Presents at Baird 55th Annual Global Industrial Conference Transcript

Nov -11

Source: seekingalpha.com

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World Investment Advisors Takes Position in Cognex Corporation $CGNX

Nov -06

Source: defenseworld.net

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Cognex Corporation $CGNX Shares Purchased by Teacher Retirement System of Texas

Nov -05

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.49%)

6. Segments

Standard Products and Services

Expected Growth: 11.0%

Cognex Corporation's Standard Products and Services segment growth of 11.0% is driven by increasing demand for machine vision and industrial barcode reader (IBR) products, expansion into new markets, and growing adoption in industries such as logistics, e-commerce, and food processing. Additionally, the company's strategic investments in research and development, sales, and marketing have contributed to the segment's growth.

Application-specific Customer Solutions

Expected Growth: 15.0%

Cognex Corporation's Application-specific Customer Solutions segment growth of 15.0% is driven by increasing demand for machine vision and industrial barcode reader solutions, particularly in the e-commerce, logistics, and manufacturing industries. Additionally, the company's strategic acquisitions and investments in emerging technologies such as AI and robotics are contributing to its growth momentum.

7. Detailed Products

Machine Vision Systems

Cognex's machine vision systems are used to inspect and analyze products on the production line, ensuring quality and detecting defects.

Barcode Readers

Cognex's barcode readers are used to quickly and accurately read barcodes, enabling efficient tracking and inventory management.

Industrial Barcode Scanners

Cognex's industrial barcode scanners are designed for harsh industrial environments, providing reliable barcode scanning in demanding applications.

Vision Software

Cognex's vision software provides a comprehensive platform for machine vision applications, including image processing, analysis, and automation.

Deep Learning-based Vision Systems

Cognex's deep learning-based vision systems use AI and machine learning to enable advanced image analysis and automation.

8. Cognex Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Cognex Corporation's products are highly specialized and customized, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While Cognex Corporation has a diverse customer base, some large customers may have bargaining power due to their significant purchases.

Bargaining Power Of Suppliers

Cognex Corporation has a diversified supply chain, reducing dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

The machine vision industry has high barriers to entry, including significant R&D investments and specialized expertise, making it difficult for new entrants to compete with Cognex Corporation.

Intensity Of Rivalry

While Cognex Corporation is a market leader, it faces competition from other established players in the machine vision industry, leading to a moderate level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.96%
Debt Cost 3.95%
Equity Weight 95.04%
Equity Cost 11.35%
WACC 10.98%
Leverage 5.22%

11. Quality Control: Cognex Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Trimble

A-Score: 4.8/10

Value: 1.2

Growth: 5.2

Quality: 6.6

Yield: 0.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Itron

A-Score: 4.6/10

Value: 3.1

Growth: 5.7

Quality: 6.7

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Cognex

A-Score: 3.9/10

Value: 0.9

Growth: 2.7

Quality: 7.6

Yield: 2.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
MKS Instruments

A-Score: 3.8/10

Value: 2.8

Growth: 5.0

Quality: 4.7

Yield: 1.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Novanta

A-Score: 3.3/10

Value: 1.1

Growth: 7.0

Quality: 5.6

Yield: 0.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Coherent

A-Score: 3.2/10

Value: 1.4

Growth: 4.9

Quality: 3.8

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

38.42$

Current Price

38.42$

Potential

-0.00%

Expected Cash-Flows