Cognex Essay
Cognex is a global leader in machine-vision and ID systems used to automate manufacturing and logistics operations, which acquires maker of deep learning Software for industrial machine vision and two 3D Vision Companies from December. The firm commands a sustainable leadership position in this fragmented $3 billion market, and is positioned through innovation and roll-up M&A to outpace the TAM’s 8- 10% CAGR. In short, CGNX stock yields pure-play exposure to a secular growth opportunity, a solidly profitable company, supported by a strong balance sheet.
Cognex Corporation (Cognex) is a provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. The company, headquartered in Natick, MA, founded in 1981,employs …show more content…
The closed direct comparable is Keyence, a somewhat larger and more diversified Japanese company that is listed on the TSE and trades under the ticker “6861 JP.” We note that Cognex and Keyence trade at similar growth multiples.
SWOT:
Strengths:
• Global sales and channel
• R&D investment, patents, software competence
• High growth rate, profitability and revenue
The fact that Cognex is able to realize an approximately 80% gross margin on product sales presents the strong position because of wide global sales and channel. Cognex’s ability to compete depends upon the ability in R&D investment, patents, software competence. Cognex reported the highest annual revenue, profitability and growth rate of 2016 in our company's 36-year history.
Weakness:
• Narrow product lineup
• Limited future profitability
• Limited future market size
A key weakness is the lack of product lineup and the limited forward visibility of future profitability and market size due to the high growth rate.
Opportunities:
• China and other developing
Cognex Corporation (Cognex) is a provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. The company, headquartered in Natick, MA, founded in 1981,employs …show more content…
The closed direct comparable is Keyence, a somewhat larger and more diversified Japanese company that is listed on the TSE and trades under the ticker “6861 JP.” We note that Cognex and Keyence trade at similar growth multiples.
SWOT:
Strengths:
• Global sales and channel
• R&D investment, patents, software competence
• High growth rate, profitability and revenue
The fact that Cognex is able to realize an approximately 80% gross margin on product sales presents the strong position because of wide global sales and channel. Cognex’s ability to compete depends upon the ability in R&D investment, patents, software competence. Cognex reported the highest annual revenue, profitability and growth rate of 2016 in our company's 36-year history.
Weakness:
• Narrow product lineup
• Limited future profitability
• Limited future market size
A key weakness is the lack of product lineup and the limited forward visibility of future profitability and market size due to the high growth rate.
Opportunities:
• China and other developing