Cognex Languishing Through A Painful Reset Of A Major Growth Market

It would have been difficult to be more wrong about Cognex (NASDAQ:CGNX) than my call back in April that, despite challenges in the logistics market (warehouse automation), this machine vision company would still manage double-digit growth in 2022. In fact, Cognex is likely looking at not only a revenue decline in 2022, but quite possibly a decline in 2023 as well given weaker macro trends. With weaker end-market demand (and a fire at a manufacturing partner), Cognex is on pace for far less in terms of profitability and cash flow than I’d expected, and it may not be “business as usual” until 2024/2025.

Down about a third since my last ill-fated update, Cognex has been a notable laggard in an otherwise flattish market for other automation names like Datalogic (OTC:DLGCF), Fanuc (OTCPK:FANUY), Keyence (OTCPK:KYCCF), Rockwell (ROK), and Yaskawa (OTCPK:YASKY), though KION (OTCPK:KIGRY), another logistics-driven name, has been even weaker. While I do see long-term value in the name here, it’ll be difficult for sentiment to turn with logistics revenue likely down 20%-plus again in 2023, particularly if other end-markets weaken more than seems to be baked into sell-side expectations.

 

Continue here: 

Cognex Languishing Through A Painful Reset Of A Major Growth Market