# Cognex Corporation (CGNX) — InvestMoat Analysis _Last analyzed: October 18, 2026_ _Asset class: equity · Canonical page: https://www.investmoat.com/stocks/cgnx_ ## Scores | Dimension | Score (0–100) | | --- | --- | | Moat durability | 65 | | Growth trajectory | 72 | | Valuation | 75 | | **Composite** | **71** | Scores are computed deterministically from this asset’s data by the InvestMoat formula (see https://www.investmoat.com/llms.txt for methodology). Scores are not directly comparable across asset classes. ## Key stats - **Ticker:** CGNX - **Market Cap:** ~$9.1B - **Price:** $53.99 ## Moat Cognex is the largest Western pure-play in machine vision and image-based barcode reading, with roughly mid-teens share of a ~$7B served market: its readers and vision systems are written into sortation lines, electronics assembly and packaging inspection, but the lock lasts one line build, and Keyence's direct-sales model and Chinese vision vendors contest every new one. ### Designed Into the Line, Re-Won at the Next One Cognex's moat is **a DataMan reader or In-Sight camera already qualified into a running line**, backed by vendor-owned pattern-matching and decode algorithms, but it is a per-line lock in a fragmented market, not a franchise that holds share by itself: - **The Qualified Line:** Once a vision job is tuned and validated on an automotive, packaging or electronics line, swapping the camera means re-teaching the inspection and re-validating yield, so Cognex keeps the installed line and its replacement and upgrade business. The weakness is that its biggest end markets re-tender often: consumer-electronics lines are rebuilt around each product cycle and e-commerce distribution centres are bid project by project, which is why Cognex's revenue is far lumpier than Keyence's. - **Vendor-Owned Vision and Decode IP:** PatMax geometric pattern matching, the image-based decode engines in DataMan, and the deep-learning tools now folded into the OneVision cloud platform are Cognex's own software, funded by R&D of about 14% of revenue (~$139M in 2025). That is real IP, but deep-learning vision is also the layer where general-purpose models, cheap smart cameras and Chinese vendors such as Hikrobot are closing the gap fastest. - **Not Keyence's Margin, Not Its Channel:** Cognex sells through a mix of direct key accounts, distributors and integrators to roughly 30,000 customers, and its 2024 China price cuts showed the share it holds is priced, not owned. The 2025–26 reset (one sales organisation, about 9,000 new accounts added in 2025, $35–40M of net cost savings) lifted adjusted EBITDA margin from ~21% to a 32% quarter, but Keyence still runs operating margins above 50% on a direct model Cognex has not copied. **Moat verdict:** Cognex is a net AI beneficiary on demand, because deep-learning inspection widens what vision can do on a line and OneVision is built for it, but AI is also what lowers the barrier for rivals. Its AI-resilient pillars, line embedding and process validation, are real but intact rather than category-defining, while its AI-vulnerable vision and decode IP is where general-purpose models and Chinese smart cameras press hardest. It is a durable, good franchise in a fragmented market, not a fortress. ### Top competitors - **[Keyence (6861.T)](https://www.investmoat.com/stocks/keyence):** Vision systems and code readers sold direct into the same factory lines. - **Zebra Technologies (ZBRA):** Fixed industrial scanners and Matrox machine-vision software in logistics and manufacturing. - **Hikrobot:** Chinese smart cameras and code readers competing on price in China and Asia. - **SICK:** Industrial sensors, code readers and vision for logistics sortation. ## Growth FY2025 revenue was $994M, up 9% (7% excluding a one-time commercial-partnership benefit), with adjusted EBITDA margin of 21.5% and free cash flow of $237M. 2026 is a recovery year: Q1 revenue rose 24% to ~$268M and Q2 a record $291.3M (+17%), with adjusted EBITDA margin up to 32.2% and adjusted EPS $0.45 (vs $0.25). Logistics has posted nine straight quarters of double-digit growth, semiconductor grew over 20% in Q1, consumer electronics is growing and automotive has bottomed. Full-year guidance is $1.13–1.15B of revenue (+15%, +16% ex the one-time benefit), 29–31% adjusted EBITDA margin and $1.64–1.68 adjusted EPS; Q3 is guided to $300–320M, reported November 4. The 3–5 year rate has to be measured off the cycle, not 2026: revenue in 2025 was still below the 2021 peak. - **Revenue CAGR estimate:** 7-11% - **Primary type:** market share - **Margin trend:** expanding - **Key risk (moderate):** Logistics and consumer-electronics capex digests in 2027 after the 2026 rebound while Chinese vision vendors keep pressing on price, so organic revenue growth falls back below 5% and adjusted EBITDA margin slips under the 25% exit-rate floor management set for 2026. - **Drivers:** - Logistics (e-commerce & parcel) — Nine consecutive quarters of double-digit growth through Q2 2026; management guided 2026 to moderate to mid-to-high single digits (stable) - Semiconductor — Revenue +20%+ YoY in Q1 2026 and ahead of plan across Asia in Q2; mid-single-digit growth in 2025 (accelerating) - Consumer Electronics & Automotive — Consumer electronics double-digit growth in 2025, guided high single to double digits for 2026; automotive −high single digits in 2025, back to mid-single-digit growth in 2026 (stable) - **Score derivation:** Base 71.4 (9% midpoint of 7–11%) + 1.3 trajectory (semiconductor accelerating; logistics held stable because management guided it to moderate from double digits; consumer electronics stable) + 4 expanding margin (adj. EBITDA 21.5% in 2025 to 29–31% guided for 2026) − 5 moderate risk (factory-automation and consumer-electronics capex cycle plus China pricing, the same moderate step as Keyence) = 72 ## Valuation At the $53.99 close on October 16, 2026, CGNX sits about 61% of the way from the bear case ($40) to base ($63), a 75 on the ladder, after falling from a $72.88 52-week high. The base is about 30× a ~$2.10 FY2027 adjusted EPS, close to Keyence's ~28–32× despite a weaker moat and far lower margin, because Cognex's earnings are still mid-recovery (2026 adjusted EPS guided up about 60%) and Cognex has historically traded above Keyence on forward earnings; the base sits about 17% below the Street mean, which prices a full margin recovery that has not yet been through a downturn. | Multiple | Value | Note | | --- | --- | --- | | Trailing P/E (GAAP) | ~52× | Depressed 2025 base; restructuring charges | | Forward P/E (FY26) | ~33× | $1.64–1.68 adj. EPS guide | | Forward P/E (NTM) | ~27× | ~$2.00 consensus NTM adj. EPS | | PEG Ratio | ~1.8× | NTM P/E ÷ ~15% EPS CAGR | | Price / Sales (FY26) | ~7.9× | $1.14B revenue guide midpoint | | Price / FCF | ~38× | $237M FY2025 FCF | On NTM earnings Cognex is at a premium to the S&P 500 but at the low end of its own history and slightly below Keyence's ~28–32×, and the drop from 52× trailing to 27× NTM is the margin recovery showing through rather than a cheap multiple. A PEG near 1.8× says the price already credits mid-teens EPS growth, so the margin of safety rests on the 30%+ EBITDA quarter holding through the next automation downturn. _(as of October 18, 2026)_ ## Price scenarios ### Bear — $40 The 2026 rebound proves to be a capex spike: logistics and consumer-electronics customers digest, China pricing pressure returns, and FY2027 adjusted EPS stalls near $1.75 on a ~23× multiple. - Q3 or Q4 2026 revenue lands at or below the low end of guidance ($300M for Q3) as e-commerce distribution-centre projects slip - Adjusted EBITDA margin falls back below the 25% exit-rate floor in 2027 as volume deleverage outruns the $35–40M cost savings - Hikrobot and other Chinese vision vendors force another round of price cuts in Greater China, roughly 16% of revenue ### Base — $63 Revenue grows high single to low double digits off the 2026 recovery, adjusted EBITDA margin holds near 30%, and FY2027 adjusted EPS of ~$2.10 earns about 30×. - FY2026 revenue lands inside the $1.13–1.15B guide and adjusted EPS inside $1.64–1.68 - Adjusted EBITDA margin stays at or above 28% through 2027 as opex grows slower than revenue - Buybacks under the $500M authorisation keep the share count flat to down despite stock compensation ### Bull — $86 Semiconductor and logistics strength compounds, OneVision and the new AI products widen the customer base toward management's doubling goal, and FY2027 adjusted EPS of ~$2.40 earns about 36×, back toward the 52-week high and Street-high targets. - Revenue growth holds above 12% into 2027 as semiconductor and packaging join logistics in double digits - Adjusted EBITDA margin moves into the upper half of the raised 25–31% through-cycle band on a sustained basis - Customer count rises well past the ~30,000 Investor Day baseline as the new-account rate of 2025 (~9,000) repeats --- InvestMoat is a research and education framework. Nothing here is financial advice. Past performance does not guarantee future results.