The Fundamental Case for and Against Cognex Corporation (CGNX)

Cognex Corporation (NASDAQ:CGNX) trade is getting exciting but lets take a deeper look whether it is as good a moment. Now trading with a market value of 9.93B, the company has a mix of catalysts and obstacles that spring from the nature of its operations. As the day-to-day narrative ebbs and flows for this company, it is more important than ever to step back and get a bird’s eye view of the fundamental reality under the surface of this story.

Cognex Corporation (NASDAQ:CGNX) Fundamentals That Matter

It’s generally a good idea to start with the most fundamental piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For CGNX, the company currently has 111.35 million of cash on the books. The trend over time is important to note. In this case, the company’s debt has been growing. The company also has 1.26 billion in total assets, balanced by 124.99 million in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Cognex Corporation (CGNX) saw 41.56 million in free cash flow last quarter, representing a quarterly net change in cash of 43.08 million. Perhaps most importantly where cash movements are concerned, the company saw about 49.43 million in net operating cash flow.

Cognex Corporation (NASDAQ:CGNX) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 259.68 million in total revenues. That represents a quarterly year/year change in revenues of 0.75 in sequential terms, the CGNX saw sales decline by 0.50.

But what about the bottom line? After all, that’s what really matters in the end. Cognex Corporation (CGNX) is intriguing when broken down to its core data. The cost of selling goods last quarter was 62.36 million, yielding a gross basic income of 197.32 million. For shareholders, given the total diluted outstanding shares of 179.35 million, this means overall earnings per share of 0.57. Note, this compares with a consensus analyst forecast of 0.25 in earnings per share for its next fiscal quarterly report.

Is Cognex Corporation (NASDAQ:CGNX) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about 1.47 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 36.59. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Cognex Corporation.

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