Cognex Corporation EBITDA surged on 17.7% and EBITDA Margin increased slightly on 1.3 pp from 24.0% to 25.3%
02/11/2021 • About Cognex Corporation (
$CGNX) • By InTwits
Cognex Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cognex Corporation is a growth stock: 2020 revenue growth was 11.8%, 5 year revenue CAGR was 12.5% at 2020 ROIC 13.9%
- Cognex Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $13m in 2020, $22m in 2019, $37m in 2018, $29m in 2017, $13m in 2016
- The company has highly profitable business model: ROIC is 13.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 11.8%. Revenue growth showed acceleration in 20Q4 - it increased 31.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 15.7% to 19.6% in 2020.
Gross Margin increased slightly on 0.70 pp from 73.8% to 74.5% in 2020. SG&A as a % of Revenue decreased on 4.7 pp from 37.7% to 33.0% in 2020.
Net Income margin decreased on 6.4 pp from 28.1% to 21.7% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Cognex Corporation had CAPEX/Revenue of 1.6%. Cognex Corporation's CAPEX/Revenue decreased on 2.1 pp from 3.8% in 2017 to 1.6% in 2020. Average CAPEX/Revenue for the last three years was 3.1%. During the last 5 years CAPEX as a % of Revenue topped in 2018 at 4.6% and was declining since that time.
Return on investment
The company operates at good ROIC (13.9%) and ROE (13.5%). ROIC increased slightly on 2.0 pp from 11.9% to 13.9% in 2020. ROE decreased on 2.9 pp from 16.4% to 13.5% in 2020. During the last 5 years ROE topped in 2018 at 19.7% and was declining since that time.
Leverage (Debt)
Debt level is -1.2x Net Debt / EBITDA and 0.1x Debt / EBITDA. Debt jumped on 45.9% while cash jumped on 57.0%.
Cognex Corporation has no short term refinancing risk: cash is higher than short term debt (3,317.8%).
Valuation and dividends
Cognex Corporation's trades at EV/EBITDA 72.4x and P/E 85.6x.
Management team
Robert Jolyon Willett "Rob" is a Cognex Corporation's CEO. Robert Jolyon Willett "Rob" has spent 10 years with the company. Paul Todgham is a the company's CFO. Paul Todgham has spent 1 year at the company.
Financial and operational results
FY ended 12/31/2020
Cognex Corporation ($CGNX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 529.5 | 766.1 | 806.3 | 725.6 | 811.0 | 11.8% |
| Gross Profit | 398.4 | 578.8 | 600.3 | 535.9 | 604.6 | 12.8% |
| SG&A | 166.1 | 220.7 | 262.7 | 273.8 | 267.6 | -2.3% |
| EBITDA | 169.1 | 275.9 | 242.7 | 174.4 | 205.2 | 17.7% |
| EBIT | 154.1 | 258.9 | 221.1 | | | |
| Tax | 18.1 | 89.8 | 15.3 | | | |
| Net Income | 143.7 | 176.7 | 219.3 | 203.9 | 176.2 | -13.6% |
| Stock Based Compensation | 20.6 | 31.9 | 41.1 | | | |
Balance Sheet
|
|---|
| Cash | 79.6 | 106.6 | 108.2 | 171.4 | 269.1 | 57.0% |
| Accounts Receivable | 55.4 | 119.4 | 119.2 | | | |
| Inventory | 27.0 | 67.9 | 83.3 | | | |
| Accounts Payable | 9.8 | 23.5 | 16.2 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 5.6 | 8.1 | 43.6% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 12.3 | 18.1 | 47.0% |
Cash flow
|
|---|
| Capex | 12.8 | 28.8 | 37.1 | 21.7 | 13.3 | -38.8% |
| Dividends | 25.0 | 29.0 | 32.0 | | | |
| Acquisitions | 14.3 | 24.1 | 4.3 | | | |
Ratios
|
|---|
| Revenue growth | 17.5% | 44.7% | 5.3% | -10.0% | 11.8% | |
| EBITDA growth | 24.7% | 63.1% | -12.0% | -28.1% | 17.7% | |
|
|---|
| Gross Margin | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% | 0.7% |
| EBITDA Margin | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% | 1.3% |
| EBIT Margin | 29.1% | 33.8% | 27.4% | | |
| SG&A, % of revenue | 31.4% | 28.8% | 32.6% | 37.7% | 33.0% | -4.7% |
| SBC, % of revenue | 3.9% | 4.2% | 5.1% | | |
| Net Income Margin | 27.1% | 23.1% | 27.2% | 28.1% | 21.7% | -6.4% |
| CAPEX, % of revenue | 2.4% | 3.8% | 4.6% | 3.0% | 1.6% | -1.4% |
|
|---|
| ROIC | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% | 2.0% |
| ROE | 16.1% | 17.2% | 19.7% | 16.4% | 13.5% | -2.9% |
| Net Debt/EBITDA | -0.5x | -0.4x | -0.4x | -0.9x | -1.2x | -0.3x |
People
|
|---|
| Insider ownership | 4.7% | 4.7% | 4.7% | | | |
| Employees | 1,421 | 1,771 | 2,124 | | | |
| Revenue/Employee, th. $ | 373 | 433 | 380 | | | |
Cognex Corporation ($CGNX) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 167 | 169 | 251 | 224 | | -3.6% | -15.0% | 37.0% | 31.7% |
| EBITDA | 30 | 29 | 105 | 68 | | -20.5% | -50.7% | 106.9% | 155.7% |
| Net Income | 20 | -1 | 88 | 69 | | -38.1% | -102.3% | 109.9% | -13.7% |
Balance Sheet
|
|---|
| Cash | 239 | 286 | 298 | 269 | | 127.2% | 221.0% | 145.2% | 57.0% |
| Short Term Debt | 6 | 8 | 8 | 8 | | 3.1% | 30.7% | 44.4% | 43.6% |
| Long Term Debt | 12 | 21 | 20 | 18 | | 3.9% | 74.6% | 87.0% | 47.0% |
Ratios
|
|---|
| Gross Margin | 75.4% | 70.2% | 76.2% | 75.3% | | 2.0% | -4.2% | 2.2% | 1.8% |
| EBITDA Margin | 17.9% | 17.4% | 41.8% | 30.3% | | -3.8% | -12.6% | 14.1% | 14.7% |
| Net Income Margin | 12.2% | -0.7% | 34.9% | 31.0% | | -6.8% | -25.2% | 12.1% | -16.3% |
Peers in Electronic Equipment & Instruments
Below you can find Cognex Corporation benchmarking vs. other companies in Electronic Equipment & Instruments industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Identiv, Inc. ($INVE) | - | 7.2% | 29.8% | 7.2% | 3.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 11.6% | 5.2% | -3.5% |
|---|
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| Keysight Technologies Inc. ($KEYS) | 55.7% | 53.4% | 54.7% | 58.9% | 60.0% |
| |
|---|
| Median (26 companies) | 39.4% | 41.0% | 40.4% | 42.2% | 42.9% |
|---|
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| Track Group Inc ($TRCK) | -3.5% | -1.4% | 7.6% | 15.4% | 21.0% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.0% | 8.7% |
|---|
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.2% | 1.9% | 2.8% |
|---|
| Cognex Corporation ($CGNX) | 2.4% | 3.8% | 4.6% | 3.0% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
| NAPCO Security Technologies, Inc. ($NSSC) | - | - | - | 19.8% | 13.6% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 0.9% | 7.8% | 3.4% |
|---|
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| |
|---|
| Median (16 companies) | -0.9x | -0.9x | -1.0x | 0.5x | 0.7x |
|---|
| Cognex Corporation ($CGNX) | -0.5x | -0.4x | -0.4x | -0.9x | -1.2x |
