Yahoo Finance Cognex Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
As you might know, Cognex Corporation (NASDAQ:CGNX) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$211m arriving 5.2% ahead of forecasts. Statutory earnings per share (EPS) were US$0.07, 9.2% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Cognex
Taking into account the latest results, the consensus forecast from Cognex's 18 analysts is for revenues of US$935.6m in 2024. This reflects a solid 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 21% to US$0.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$932.6m and earnings per share (EPS) of US$0.74 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$47.33, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Cognex analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$36.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Cognex's growth to accelerate, with the forecast 14% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cognex to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cognex. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Cognex. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Cognex analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Cognex has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
