Start here if you're new
what it is
Cognex sells machine-vision gear that helps factories and warehouses inspect, read, and sort products automatically.
how it gets paid
Last year Cognex made $994M in revenue. Machine vision systems was the main engine at $389M, or 39% of sales.
why it's growing
Revenue grew 8.7% last year. Cognex stands to benefit as more retail sales move online and as e-commerce companies like amazon further automate the warehouses that fulfill online orders.
what just happened
Cognex missed by $0.03 last quarter even as revenue reached $742M.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
41.4x trailing p/e — you're paying up for this one
0.9% dividend yield — cash in your pocket every quarter
18.5% return on capital — nothing to write home about
xvary composite: 51/100 — below average
What they do
Cognex sells machine-vision gear that helps factories and warehouses inspect, read, and sort products automatically.
Cognex got 66% of 2024 revenue from outside the U.S. That means your sales base is global, not one-country brittle. It does this with 2,914 employees and third-party contractors (outside builders) making most hardware, so it stays lighter than a factory-heavy rival.
How they make money
$994M
annual revenue · their business grew +8.7% last year
Machine vision systems
$389M
Industrial barcode readers
$238M
Vision sensors
$159M
Software and services
$208M
The products that matter
inspects parts on production lines
Machine Vision Systems
part of a $1.0B business
these systems sit inside the same $1.0B revenue base that grew 8.7% last year. the disclosure here does not break out exactly how much they contribute, so you are betting on the full platform rather than one disclosed hero segment.
factory core
turns images into decisions
Vision Software
supports 18.8% net margin
software helps explain why a hardware-adjacent automation business can still keep 18.8% of revenue as profit. what we do not get here is a separate software revenue line, so margin matters more than segment storytelling.
margin support
reads codes in warehouses
Barcode Readers
exposed to logistics demand
barcode readers tie Cognex to warehouse and e-commerce automation, but again, the page gives no segment dollars. you know the whole company did $1.0B in revenue and grew 8.7%. you do not know which end market did the heavy lifting.
logistics exposure
Key numbers
$994M
annual revenue
This is the whole business in one number. It is 8.7% above last year, so the top line is moving, not sprinting.
23.0%
operating margin
Operating margin (profit left after running the business) is 23.0%. That is rich for a hardware shop.
18.5%
return on capital
Return on capital (profit per dollar tied up in the business) is 18.5%. That says Cognex earns more than it spends.
1.4
beta
Beta (how much the stock wiggles versus the market) is 1.4. You own extra bounce on both sides.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- net profit margin 19.6% — keeps 20 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CGNX 3 years ago → it's now worth $7,590.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
Cognex missed by $0.03 last quarter even as revenue reached $742M.
Revenue was $742M, up 168% vs. prior year, and gross margin was 67.3%. EPS was $0.19 versus $0.22 expected, a 13.64% miss.
$0.74B
revenue
$0.19
eps
67.3%
gross margin
the number that mattered
The $0.19 EPS print mattered most because it missed $0.22 by 13.64%, even with $742M of revenue.
-
cognex probably enjoyed strong double-digit bottom-line growth last year.
-
indeed, at $0.95, our 2025 shareearnings estimate for the developer of machine vision (mv) technology implies a robust advance of nearly 30% over the $0.74 that the massachusetts company tallied the prior year.
-
our key assumptions include revenues of $980 million (up 7% from the prior year’s $914.5 million) and profit-margin expansion of more than 200 basis points. (note: the company was scheduled to release its full-year 2025 results shortly after we went to press.), the picture here still seems pretty bright.
-
to wit, management recently sized the markets that cognex serves at roughly $7 billion.
-
furthermore, it figured they should grow at an average of 10%–11% annually for the foreseeable future, largely thanks to strong secular trends.cognex stands to benefit as more retail sales move online and as e-commerce companies like amazon further automate the warehouses that fulfill online orders (through the use of robotics and mv technology).
source: EDGAR SEC filing and Yahoo Finance consensus, latest quarter
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What could go wrong
the #1 risk is factory and warehouse automation spending slowing.
med
automation capex cools off
Cognex sells into factories and warehouses. If customers delay new lines, scanners, or inspection upgrades, orders can slip fast because this is tied to capital spending, not daily consumer demand.
With annual revenue at $1.0B and growth at 8.7%, a slowdown does not leave much room for a premium 41.4x earnings multiple to stay premium.
med
margin pressure keeps outrunning revenue growth
The latest quarter already showed the pattern: revenue up 18%, EPS down 41%. If that repeats, the market stops treating this like a quality compounder and starts treating it like a cyclical hardware name.
An 18.8% net margin is healthy today. The danger is not current profitability — it is a future mix where sales rise but earnings do not.
med
the stock is expensive for a business with mixed momentum
Three-year total return went the wrong way, the xvary composite is 51/100, and short-term momentum ranks below average. Yet the stock still trades at 41.4x trailing earnings.
When a stock is priced for quality, merely okay execution can be enough to compress the multiple.
At 41.4x earnings on a $1.0B revenue base, Cognex does not need a disaster to get repriced. It just needs slower orders or another quarter where revenue rises and EPS falls.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
whether EPS starts moving with revenue again
Q4 gave you +18% revenue growth and a 41% EPS drop. if that gap closes, the quality case gets cleaner.
trend
automation demand across factories and warehouses
this business lives on customer capex. you want to see order demand stay healthy enough to support growth above the recent 8.7% pace.
risk
whether the multiple stays ahead of the fundamentals
41.4x earnings is generous. if growth stays merely okay, valuation becomes the story.
calendar
the next earnings print
with earnings predictability at 60/100, the next quarter matters more than usual. this is not a stock where you can ignore execution drift.
Analyst rankings
short-term outlook
below average
momentum score 4. in human-speak, analysts think this stock has weaker near-term price momentum than most.
risk profile
average
stability score 3. this is not a bunker stock, but it is not chaos either.
chart momentum
below average
technical score 4. the chart is not giving you much help right now.
earnings predictability
60 / 100
good enough to model, noisy enough to surprise you.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 280 buyers vs. 206 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$26
$68
$39
current price
$47
target midpoint · +19% from current · 3-5yr high: $60 (+50% · 12% ann'l return)
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