The Market Seems Focused On Cognex's Long-Term Potential Over Short-Term Troubles

Institutional investors aren’t famous for their patience, and growth investors are typically even more unforgiving when their growth darlings come in a few ticks below expectations. And yet Cognex (CGNX), which posted over 20% year-over-year revenue contraction and once again guided down, is getting off relatively light, or at least in the immediate post-earnings period. 

Don’t get me wrong – I like Cognex and I think it’s one of the best plays on logistics automation and the “factory of the future” theme. I’m just surprised that the Street is still comfortable paying over 30x 2021 EBITDA during this cyclical downturn. I think the long-term potential return here is still okay, but I’d love a more pronounced “buy the dip” opportunity again.

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The Market Seems Focused On Cognex's Long-Term Potential Over Short-Term Troubles