Earnings Beat: Cognex Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders in Cognex Corporation (NASDAQ:CGNX) had a terrible week, as shares crashed 23% to US$38.22 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$239m were in line with what the analysts predicted, Cognex surprised by delivering a statutory profit of US$0.21 per share, a notable 14% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Cognex

Taking into account the latest results, the current consensus from Cognex's 18 analysts is for revenues of US$911.4m in 2024. This would reflect an okay 8.0% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 33% to US$0.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$933.2m and earnings per share (EPS) of US$0.68 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The analysts made no major changes to their price target of US$48.76, suggesting the downgrades are not expected to have a long-term impact on Cognex's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cognex, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$39.00 per share. 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 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Cognex is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$48.76, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Cognex analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Cognex that you need to be mindful 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com