CGNX - Embedded Expectations Analysis - 2021 09 20
Cognex Corporation (CGNX:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 42.8x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the sustainability of revenue growth, gross margins improvement in logistics, and the potential of VisionPro Deep Learning 2.0.Specifically, management may be overstating their technology leadership position in the logistics end market, the potential of a major new logistics customer, and the advantages of their VisionPro Deep Learning 2.0 software. Furthermore, they may have concerns about uptake of their other deep learning products and lower levels of investment in smartphone manufacturing compared to a year ago. In addition, management may be lack confidence in their ability to sustain elevated revenue growth and improve gross margins in logistics by transitioning from customized to standard solutions. Finally, management may have concerns about backlogs and delays and the pace of market recovery in logistics for smaller customers.
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.