Cognex Corp (CGNX) stock analysis

P/E below its 5-year median

Cognex's P/E of 36.2 is below its own 5-year median of 52.9.

P/E below the industry

Cognex's P/E of 36.2 is below the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA below its 5-year median

Cognex's EV/EBITDA of 28.4 is below its 5-year median of 41.6.

P/B above the industry

Cognex's price-to-book of 5.05 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading below fair value

The share price of $51.72 is below our fair value estimate of $57.68.

Margin of safety under 20%

The price is 10.3% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -0.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -17.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 120% over the last twelve months, against a 5-year average of -8.3% a year.

Growing faster than the industry

Revenue grew 15.8% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Guidance issued

The latest outlook (Q2 2026 Adjusted EBITDA Margin, May 6, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 69.7% over the last twelve months, against 67.6% a year earlier.

Return on equity under 15%

Return on equity was 15.1% over the last twelve months and averaged 11.6% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 20.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Cognex's return on equity of 15.1% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings shrank over 5 years

Net income shrank 8.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 21.5% over the last twelve months, against a 5-year average of 17.0%.

Net margin above the industry

Cognex's net margin of 21.5% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

No debt

Cognex has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 5.04 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 11.08; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Cognex paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Cognex yields 0.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 23.5% of net income.

Covered by free cash flow

Dividends take 19.9% of free cash flow.