Truist Securities increased its price target on Cognex (NASDAQ:CGNX) to $52.00 from $42.00 while retaining a Hold recommendation after the company reported fourth-quarter results that outpaced expectations on revenue, margins and adjusted earnings per share.
InvestingPro data cited by the company shows the stock trading near its fair value, carrying a price-to-earnings ratio of 83.45. Analyst target prices for Cognex range from $35 to $80.
Cognex shares closed the day up 36% following the results. The company posted revenue of $252 million, above management guidance of $230-245 million. That top-line represented a 10% increase from the prior year and a 9% increase after adjusting for foreign exchange effects. According to InvestingPro figures, the stock has returned 38.47% over the past week and 74.52% over the last 12 months, trading at $57.89 and approaching its 52-week high of $59.88.
The machine vision equipment maker reported broad-based demand across most end markets, with encouraging indicators toward the end of 2025. For fiscal 2026 the company expects growth in all end markets and projects organic sales growth in the mid-to-high single-digit percentage range, an upgrade from the mid-single-digit organic growth outlook it provided in the prior quarter. That guidance sits alongside a 5-year revenue compound annual growth rate of 4% and an analyst consensus revenue growth forecast of 5% for fiscal 2026.
Profitability metrics improved materially in the quarter. Adjusted gross margin reached 71.6%, a 220 basis-point improvement year-over-year driven by higher volumes and a favorable product mix, partly offset by the impact of tariffs. Adjusted EBITDA was $57 million, up 35% from the comparable period and equating to 22.7% of sales, above the company's guidance range of 17-20%.
Over the last twelve months, InvestingPro reports a gross profit margin of 68.39% and total EBITDA of $208.46 million. Management has raised its long-term adjusted EBITDA margin target to a 25-31% band from a previous 20-30% band and is targeting a 25% adjusted EBITDA margin run rate by the end of 2026.
Capital allocation moves accompanied the operational updates. Cognex expanded its share repurchase authorization by $500 million and had $151 million remaining under the buyback program at the close of the fourth quarter of 2025. The company has also sustained dividend payments for 12 consecutive years. Liquidity and balance sheet indicators include a current ratio of 3.8, which InvestingPro characterizes as signaling strong short-term liquidity, and the company operates with a moderate level of debt.
Following the earnings release, several brokerages revised ratings and price targets for Cognex. Raymond James increased its target to $80 while maintaining a Strong Buy rating, highlighting robust revenue and EPS performance and calling out particularly strong results in the Logistics segment. KeyBanc raised its price target to $70, citing strong execution and an upbeat outlook for the first quarter. Bernstein SocGen moved its target to $66 and kept an Outperform rating based on an improved growth outlook and elevated margin targets.
Goldman Sachs upgraded its view on Cognex from Sell to Buy and set a $50 price target, pointing to expected growth in logistics automation as well as a pickup in consumer electronics and packaging demand. By contrast, JPMorgan downgraded Cognex to Underweight and trimmed its target to $35, citing concerns about valuation and cyclical risks even as it acknowledged the company's favorable long-term prospects.
Summary
Cognex topped expectations in the fourth quarter on revenue, margins and adjusted EPS, prompting Truist Securities to lift its price target to $52 while keeping a Hold stance. The company raised long-term margin objectives, expanded share repurchases, and signaled stronger organic growth for 2026. Multiple sell-side firms adjusted ratings and targets, reflecting divergent views on valuation, cyclicality and the sustainability of recent momentum.
Key points
- Truist raised its price target to $52 from $42 and maintained a Hold rating following Cognex's better-than-expected Q4 results.
- Cognex reported $252 million in revenue, a 10% year-over-year increase (9% ex-FX), and delivered a 71.6% adjusted gross margin with adjusted EBITDA of $57 million, or 22.7% of sales.
- Several analysts updated targets and ratings after the results - moves that highlight varied views on growth prospects, margins and valuation across the industrial automation, logistics, consumer electronics and packaging sectors.
Risks and uncertainties
- Valuation concerns - Some firms, notably JPMorgan, flagged the stock's valuation as a reason for a downgrade, indicating investor sensitivity to price levels in industrial automation exposure.
- Cyclical demand - Cyclical risks in end markets such as consumer electronics and packaging were cited as reasons for caution, which could affect near-term revenue and margin trajectories.
- Tariff impacts - Management noted tariffs partially offset margin gains, representing an ongoing headwind to profitability if trade costs persist or increase.
Tags: automation, industrial, robotics, logistics, semiconductors