I will not go to Sugarcoat This: Machine Vision Company Cognex(Nasdaq: cgnx) It goes to a difficult year, and there is a great danger that the administration will not have great news for investors when its profits are provided in the first quarter on April 30. On the other hand, stocks seem excellent value for long -term investors looking for a growth arrow for purchase and contract to contract upcoming contracts. This is the reason.
The company has a reading technology in vision and barcode. In some sense, it is the eyes, increasingly, the brain of automatic equipment. With manufacturing companies and logistics continues to invest in automated production lines and logistical services, the demand for the machine vision will increase.
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In addition, productivity is not only generated by replacing employment in terms of examining production lines, logistics and logistics, but the fact is that the machine vision solutions can do the task better than humans. Moreover, this ability is increasingly strengthened by including the artificial smart learning tools (AI) that makes their machine vision systems easier to prepare the most complex tasks.
To obtain an example of its technology, think about a smartphone manufacturer like apple (It was previously martyred as an important customer) when he needs to monitor quality control or accurately direct automatic operations. Likewise, there is a battery (EV) battery for electric cars, and another main market for Cognex, which is the exact management of automatic operations is very important to production lines, and e -commerce loyalty centers, where automation is necessary.
Photo source: Getty Images.
The three Cognex End Markets have mentioned: Consumer electronics, cars and logistics services. (The company also sells many medical automation customers and factories automation.) In general, management sees its final markets by 13 % annually, as the company grows in growth of 15 %.
The company has already achieved and improving this rate, but the past few years have been difficult, at the very least.
CGNX (TTM) revenue data by ycharts
In short, all its three main markets faced great challenges. First, in logistical services, the demand flourished in the wake of the lock as many companies accelerated investment plans in e -commerce, only to suffer from a sharp decline in recent years due to a natural correction of the previous excessive growth.
Secondly, the relatively high interest rates have reduced car sales, and there was a sharp slowdown in EV spending, in part due to the acceleration of auto companies from EV plans during the epidemic. Third, high interest rates also increased by the estimated spending of consumers on consumer electronics, and smart phone designers have stopped launching new models and made capital investments in production lines.
Throwing the current uncertainty about the conflict of customs tariffs, and Cognex is likely to be disappointed by its commercial update on April 30. This is a major history of the year, because Cognex tends to win major requests in the spring as customers are ready to prepare for production in the fourth quarter.
In fact, the Wall Street analysts have reduced their profit expectations for the company in the past two months.
Photo source: Getty Images.
Although the setting that enters the results is not great, Cognex is still very attractive. Its final markets will not be in a state of forgetfulness forever, and the machine vision is one of the answers to the issue of how the United States and other higher -cost work countries can make manufacturing and re -manufacturing from low -cost countries. The following graph shows that its evaluation is based on a 12 -month -old period historically favorable when comparing the free cash flow; The profits before the benefits, taxes, depreciation and firefighting (EBITDA) to the value of the institution (the maximum market number in addition to the net debt); Or the price for sales.
CGNX price editing cash flow data by Ycharts
Moreover, keep in mind that if Wall Street is right, these assessments are based on pelvic profits and cash flow where the company is likely to wear from the bottom in 2025, and its long -term growth rate makes it look like an excellent growth arrow at a reasonable price.
Cautious investors may want to wait for the profit report and may get a better entry point. However, if you manage possible stomach fluctuations, Cognex is an excellent arrow for long -term investors.
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Li Samha has no position in any of the mentioned stocks. Motley Fool has positions in Apple and Cognex. Motley Fool has a disclosure policy.
Prediction: Buy Cognex today will originally prepare life by Motley Fool
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