CGNX - Embedded Expectations Analysis - 2020 10 08
Cognex Corporation (CGNX:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 55.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management may have concerns about end market growth, demand weakness, and big-box retailersSpecifically, management may have concerns about the downturn in demand, the sustainability of growth in the semiconductor and life sciences markets, and growth from online learning and working from home. In addition, they may be concerned about their expectations for growth in consumer electronics, and they may lack confidence in their ability to capture growth in e-commerce. Furthermore, management may be concerned about brick-and-mortar retailers struggling with liquidity issues, the sustainability of big box retail investments in Cognex machine vision, and the potential of OLED screens. Moreover, they may be exaggerating capacity for growth and their focus on growth areas with their engineering team reorganization. Finally, management may have concerns about the sustainability of production recovery in China and logistics market growth skewed towards those who already have sophisticated e-commerce models
Cognex is a provider of machine vision products that capture and analyze visual information in order to automate manufacturing and distribution tasks where vision is required. Machine vision products are used to automate the manufacture and tracking of discrete items, such as mobile phones, aspirin bottles, and automobile tires, by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. The company provides a range of machine vision systems and sensors, vision software, and industrial image-based barcode readers. The company's products also have a variety of physical forms, depending upon the user's needs.
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