Cognex Corporation Common Stock (CGNX)

FairStock Score: 39/100 — MIXED

Key Financials

Strengths

• Generates $191 million in annual free cash flow (2.1% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.05, providing financial flexibility
• Altman Z-Score of 11.0 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($12) with negative 360% margin of safety—limited downside protection

AI Analysis

Cognex Corporation Common Stock is a small-cap technology company valued at $9.0 billion. The business generates $994 million in annual revenue with a 3.3% net margin and $191 million in free cash flow. From a quality standpoint, Cognex shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 11.0 confirms fortress-level solvency. On valuation, the stock is commanding a steep 79.6x multiple, with trades far above its Graham Number ($12) with no margin of safety. Growth dynamics show revenue growing at 9.9% and profit growth of 15.2%. Our composite FairStock Score of 39/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $191 million in annual free cash flow (2.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 80x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer