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Why the Earnings Streak Will Continue for Cognex (CGNX)

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Looking for a stock that might be in a good position to beat earnings at its next report? Consider Cognex Corporation (CGNX - Free Report) , a firm in the Electronics - Testing Equipment industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, CGNX has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, CGNX expected to post earnings of 28 cents per share, while it actually produced earnings of 33 cents per share, a beat of 17.9%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 55 cents per share, when it actually posted earnings of 63 cents per share instead, representing a 14.6% positive surprise.

Cognex Corporation Price and Consensus

 

Cognex Corporation Price and Consensus | Cognex Corporation Quote

Thanks in part to this history, recent estimates have been moving higher for Cognex. In fact, the Earnings ESP for CGNX is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for CNGX, as the firm currently has a Zacks Earnings ESP of 11.70%, so another beat could be around the corner.

This is particularly true when you consider that CGNX has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that CGNX could see another beat at its next report, especially if recent trends are any guide.

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