Down 47% in a Year, Time to Buy This Growth Stock?
With a market cap of $8.3 billion, Cognex Corporation (NASDAQ: CGNX) is not a small-cap company. However, it's still a growth company trying to build out the adoption of technology with explosive growth potential. As the leader in machine vision, Cognex's strategic aim is to grow into a served market (estimated as being worth $4.2 billion in 2018) that management sees as growing at a 12% annual rate. The good news from 2022 is Cognex is achieving many of its strategic aims; the bad news is almost everything seems to be working against the company right now. Here's the lowdown.
If you are going to make up an informal list of objectives for a growth company, it will include the following:
As alluded to earlier, Cognex is doing all three things. The company's three major machine vision markets are automotive, consumer electronics, and logistics/e-commerce. The biggest names in two of those three industries are Apple (named as a significant customer in a previous Cognex SEC filing) and Amazon.com (NASDAQ: AMZN). The latter was not named on Cognex's recent earnings call. Still, Cognex's last 10-K filing referred to a large customer in the logistics industry that represented approximately 17% of their total revenue. When an analyst refers to "the world's largest e-commerce customer," it's a reasonable bet that it's Amazon.
Source Fool.com
