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Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
7.5%
Sector: -1.4%
Dividend Analysis audit
GROWTH
0.70%
Trailing Yield
$0.70
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
54%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, COGNEX CORP (CGNX) receives a "Hold" rating with a composite score of 48.7/100, ranked #574 out of 4446 stocks. Key factor scores: Quality 50/100, Value 47/100, Momentum 65/100. This is quantitative analysis only — not investment advice.
COGNEX CORP (CGNX) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does COGNEX CORP Do?
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. COGNEX CORP (CGNX) is classified as a mid-cap stock in the Technology sector, specifically within the Measuring And Control Equipment industry. The company is led by CEO Robert J. Willett and employs approximately 2,440 people, headquartered in Natick, Massachusetts. With a market capitalization of $8.2B, CGNX is one of the notable companies in the Technology sector.
COGNEX CORP (CGNX) Stock Rating — Hold (April 2026)
As of April 2026, COGNEX CORP receives a Hold rating with a composite score of 48.7/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.CGNX ranks #574 out of 4,446 stocks in our coverage universe. Within the Technology sector, COGNEX CORP ranks #42 of 584 stocks, placing it in the top 10% of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
CGNX Stock Price and 52-Week Range
COGNEX CORP (CGNX) currently trades at $53.60. The stock lost $0.31 (0.6%) in the most recent trading session. The 52-week high for CGNX is $59.88, which means the stock is currently trading -10.5% from its annual peak. The 52-week low is $22.67, putting the stock 136.4% above its annual trough. Recent trading volume was 167K shares, suggesting relatively thin trading activity.
Is CGNX Overvalued or Undervalued? — Valuation Analysis
COGNEX CORP (CGNX) carries a value factor score of 47/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 77.52x, compared to the Technology sector average of 45.27x — a premium of 71%. The price-to-book ratio stands at 5.79x, versus the sector average of 3.16x. The price-to-sales ratio is 8.84x, compared to 1.06x for the average Technology stock. On an enterprise value basis, CGNX trades at 54.35x EV/EBITDA, versus 12.79x for the sector.
Overall, CGNX's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
COGNEX CORP Profitability — ROE, Margins, and Quality Score
COGNEX CORP (CGNX) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 7.5%, compared to the Technology sector average of -1.4%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 5.5% versus the sector average of -1.0%.
On a margin basis, COGNEX CORP reports gross margins of 67.4%, compared to 50.9% for the sector. The operating margin is 16.0% (sector: -0.5%). Net profit margin stands at 11.5%, versus -1.5% for the average Technology stock. Revenue growth is running at 15.7% on a trailing basis, compared to 14.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
CGNX Debt, Balance Sheet, and Financial Health
COGNEX CORP has a debt-to-equity ratio of 35.0%, compared to the Technology sector average of 43.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 3.80x, indicating strong short-term liquidity. Total debt on the balance sheet is $0. Cash and equivalents stand at $246M.
CGNX has a beta of 1.41, meaning it is more volatile than the broader market — a $10,000 investment in CGNX would be expected to move 41.3% more than the S&P 500 on any given day. The stability factor score for COGNEX CORP is 44/100, reflecting average volatility within the normal range for its sector.
COGNEX CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, COGNEX CORP reported revenue of $977M and earnings per share (EPS) of $0.68. Net income for the quarter was $111M. Gross margin was 67.4%. Operating income came in at $159M.
In FY 2025, COGNEX CORP reported revenue of $994M and earnings per share (EPS) of $0.68. Net income for the quarter was $114M. Gross margin was 66.9%. Revenue grew 8.7% year-over-year compared to FY 2024. Operating income came in at $163M.
In Q3 2025, COGNEX CORP reported revenue of $277M and earnings per share (EPS) of $0.11. Net income for the quarter was $18M. Gross margin was 67.6%. Revenue grew 18.0% year-over-year compared to Q3 2024. Operating income came in at $58M.
In Q2 2025, COGNEX CORP reported revenue of $249M and earnings per share (EPS) of $0.24. Net income for the quarter was $41M. Gross margin was 67.4%. Revenue grew 4.1% year-over-year compared to Q2 2024. Operating income came in at $43M.
Over the past 8 quarters, COGNEX CORP has demonstrated a growth trajectory, with revenue expanding from $239M to $977M. Investors analyzing CGNX stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
CGNX Dividend Yield and Income Analysis
COGNEX CORP (CGNX) currently pays a dividend yield of 0.7%. At this yield, a $10,000 investment in CGNX stock would generate approximately $$70.00 in annual dividend income. The net margin of 11.5% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
CGNX Momentum and Technical Analysis Profile
COGNEX CORP (CGNX) has a momentum factor score of 65/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 27/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 32/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
CGNX vs Competitors — Technology Sector Ranking and Peer Comparison
Comparing CGNX against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full CGNX vs S&P 500 (SPY) comparison to assess how COGNEX CORP stacks up against the broader market across all factor dimensions.
CGNX Next Earnings Date
No upcoming earnings date has been announced for COGNEX CORP (CGNX) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy CGNX? — Investment Thesis Summary
COGNEX CORP presents a balanced picture with arguments on both sides. Price momentum is positive at 65/100, suggesting the trend favors buyers.
In summary, COGNEX CORP (CGNX) earns a Hold rating with a composite score of 48.7/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on CGNX stock.
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Institutional Research Dossier
COGNEX CORP (CGNX) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Cognex Corporation, a leader in machine vision systems, receives a Hold rating, reflecting a balanced view of its strong market position and growth prospects against a premium valuation. While Cognex benefits from its technological expertise and exposure to growing automation trends, its current price appears to already incorporate much of this future potential, limiting near-term upside. The key takeaway is that Cognex is a well-managed company in an attractive industry, but investors should exercise caution due to valuation concerns.
The company's strong gross and operating margins, coupled with a debt-free balance sheet, underscore its financial strength. However, a high P/E ratio relative to the sector and a slowing growth rate in recent quarters raise concerns about whether the current valuation is justified. Investors should closely monitor Cognex's ability to maintain its competitive edge and accelerate revenue growth to support its premium valuation.
Business Strategy & Overview
Cognex Corporation operates in the machine vision market, providing systems and solutions that automate manufacturing and distribution processes. The company's core business revolves around capturing and analyzing visual information to enable tasks such as locating, identifying, inspecting, and measuring discrete items. Cognex serves a diverse range of industries, including consumer electronics, automotive, consumer products, food and beverage, pharmaceuticals, and medical devices. This diversification mitigates risk associated with reliance on any single industry.
Cognex employs a multi-faceted approach to product development, offering both software and hardware solutions. Its VisionPro software provides advanced programming tools, while QuickBuild allows customers to create vision applications using a graphical interface. The company's In-Sight product line offers vision systems and sensors for various applications, and DataMan provides image-based barcode readers and verifiers. This comprehensive product portfolio caters to a wide range of customer needs and applications.
The company's strategic positioning involves maintaining technological leadership through continuous innovation and expanding its market reach through a network of distributors and integrators. Cognex invests heavily in research and development to stay ahead of the competition and develop new products and solutions. Its distribution network enables it to reach a global customer base and provide localized support.
Cognex's industry context is characterized by increasing demand for automation in manufacturing and distribution. Factors such as rising labor costs, the need for improved quality control, and the growing complexity of manufacturing processes are driving adoption of machine vision systems. Cognex is well-positioned to benefit from these trends, but faces competition from other established players and emerging startups.
The company's growth strategy also includes strategic acquisitions to expand its product offerings and market presence. By acquiring companies with complementary technologies or customer bases, Cognex can accelerate its growth and strengthen its competitive position. However, successful integration of acquisitions is crucial for realizing the expected benefits.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
15.7%
Sector: 14.2%
+10% VS SCTR
Economic Moat Analysis
Cognex possesses a narrow economic moat, primarily derived from intangible assets and switching costs. The company's proprietary machine vision technology, protected by patents and trade secrets, provides a competitive advantage. This technology enables Cognex to offer superior performance and functionality compared to some competitors, creating a barrier to entry.
Switching costs also contribute to Cognex's moat. Once customers integrate Cognex's machine vision systems into their manufacturing processes, they face costs associated with switching to alternative solutions. These costs include retraining employees, reconfiguring production lines, and potential disruptions to operations. The higher the integration and reliance on Cognex's systems, the greater the switching costs.
However, the moat is not wide due to the presence of several competitors in the machine vision market. While Cognex is a leading player, it faces competition from other established companies and emerging startups. These competitors are also investing in research and development and developing innovative solutions, which could erode Cognex's competitive advantage over time.
Furthermore, the pace of technological change in the machine vision market is rapid. New technologies and approaches are constantly emerging, which could render Cognex's existing technology obsolete. The company must continuously innovate and adapt to stay ahead of the competition and maintain its moat.
The network effect is not a significant factor in Cognex's moat. While the company benefits from its large customer base and installed base of systems, the value of its products does not increase significantly as more customers adopt them. The primary value proposition is the performance and functionality of the systems themselves, rather than the size of the network.
Efficient scale is also not a major contributor to Cognex's moat. While the company benefits from economies of scale in manufacturing and distribution, these advantages are not significant enough to create a substantial barrier to entry for competitors. Other companies can also achieve similar economies of scale, limiting the impact on Cognex's competitive position.
Financial Health & Profitability
Cognex exhibits a strong financial profile, characterized by healthy revenue growth, high margins, and a robust balance sheet. The company's revenue has grown steadily over the past several years, driven by increasing demand for its machine vision systems. The TTM revenue of $994.36 million represents a 15.7% increase compared to the previous year, exceeding the sector average of 14.0%. However, examining the quarterly data reveals a potential deceleration in revenue growth, with Q3 FY2025 revenue of $276.89M only slightly higher than Q3 FY2024 revenue of $234.74M.
Cognex's gross and operating margins are significantly higher than the sector averages. The TTM gross margin of 67.4% and operating margin of 16.0% demonstrate the company's ability to generate profits from its sales. These high margins are attributable to Cognex's proprietary technology, efficient operations, and premium pricing strategy. However, the gross margin has shown a slight downward trend from 71.8% in FY2023 to 66.9% in FY2025, which warrants monitoring.
The company's return on equity (ROE) of 7.5% is significantly higher than the sector average of -1.5%, indicating efficient use of shareholder equity. Cognex's strong profitability and asset management contribute to its high ROE. However, the ROE could be higher, suggesting potential for further improvement in asset utilization or margin expansion.
Cognex maintains a pristine balance sheet with no debt and a substantial cash balance of $245.90 million. This strong financial position provides the company with flexibility to invest in research and development, pursue strategic acquisitions, and return capital to shareholders. The current ratio of 3.80 indicates ample liquidity to meet short-term obligations.
Free cash flow generation is a key strength of Cognex. The TTM free cash flow of $86.80 million demonstrates the company's ability to convert its earnings into cash. However, the absence of free cash flow data in the quarterly history makes it difficult to assess the trend in cash flow generation. Monitoring free cash flow in future quarters will be crucial for evaluating the company's financial health.
Valuation Assessment
Cognex's valuation is a key concern, with several metrics suggesting that the stock is trading at a premium. The company's P/E ratio of 72.4x is significantly higher than the sector average of 45.3x, indicating that investors are paying a premium for Cognex's earnings. This premium may be justified by the company's strong growth prospects and market leadership, but it also increases the risk of valuation compression if growth slows or expectations are not met.
The EV/EBITDA ratio of 12.7x is slightly below the sector average of 13.0x, suggesting that Cognex's enterprise value is reasonably valued relative to its earnings before interest, taxes, depreciation, and amortization. However, this metric does not fully capture the premium valuation implied by the high P/E ratio.
Given the absence of free cash flow data in the quarterly history, it is difficult to assess the company's valuation based on free cash flow yield. However, the TTM free cash flow of $86.80 million suggests that the free cash flow yield is relatively low, indicating that the stock is not particularly attractive from a free cash flow perspective.
The Momentum score of 67/100 suggests that the stock has been performing well recently, driven by positive price momentum and earnings revisions. However, momentum is a lagging indicator and does not necessarily reflect the company's long-term prospects or intrinsic value.
Overall, Cognex's valuation appears to be stretched, with a high P/E ratio and a potentially low free cash flow yield. While the company's strong growth prospects and market leadership may justify a premium valuation, investors should exercise caution and carefully consider the risks associated with paying a high price for earnings.
Risk & Uncertainty
Cognex faces several risks that could impact its future performance. One key risk is increased competition in the machine vision market. The market is becoming increasingly crowded, with new entrants and established players vying for market share. This increased competition could lead to price pressure and reduced profitability for Cognex.
Another risk is technological obsolescence. The machine vision market is characterized by rapid technological change, and Cognex must continuously innovate to stay ahead of the competition. Failure to develop new and innovative products could result in a loss of market share and reduced growth.
Economic cycles pose a significant risk. Demand for Cognex's products is closely tied to the overall health of the manufacturing sector. A slowdown in economic activity or a recession could lead to reduced capital spending by manufacturers, which would negatively impact Cognex's revenue and earnings.
Customer concentration is also a potential risk. While Cognex serves a diverse range of industries, it may have significant revenue concentration among a few large customers. Loss of one or more of these key customers could have a material adverse effect on the company's financial performance.
Finally, the company's reliance on distributors and integrators could create channel conflict or limit its control over the sales process. Cognex must effectively manage its relationships with its channel partners to ensure that its products are properly marketed and supported.
Bulls Say / Bears Say
The Bull Case
BULL VIEWCognex's leading position in the growing machine vision market, driven by automation trends, ensures continued revenue growth and market share gains.
BULL VIEWThe company's strong balance sheet, with no debt and a substantial cash balance, provides flexibility for strategic acquisitions and shareholder returns.
BULL VIEWCognex's high gross and operating margins demonstrate its pricing power and efficient operations, leading to strong profitability and cash flow generation.
The Bear Case
BEAR VIEWCognex's high P/E ratio suggests that the stock is overvalued, leaving limited upside potential and increasing the risk of valuation compression.
BEAR VIEWSlowing revenue growth in recent quarters indicates a potential deceleration in the company's growth trajectory, raising concerns about its ability to justify its premium valuation.
BEAR VIEWIncreased competition in the machine vision market could lead to price pressure and reduced profitability for Cognex, eroding its competitive advantage.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score CGNX and 4,400+ other equities.
COGNEX CORP exhibits a 303% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.5%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
67.4%
Sector: 50.9%
Operating Margin
Core business profitability
16.0%
Sector: -0.5%
Net Margin
Bottom-line profitability
11.5%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $70 annually in dividends at the current trailing rate.
