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What's in Store for Cognex (CGNX) This Earnings Season?
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Cognex Corporation (CGNX - Free Report) is set to report third-quarter 2020 results on Oct 28.
During its last earnings release, the company had issued a wider-than-usual guidance range for the third quarter citing the ongoing global uncertainty caused by COVID-19 pandemic.
Cognex projects third-quarter revenues to lie between $200 million and $220 million (mid-point $210million). The Zacks Consensus Estimate for revenues is pegged at $213.7 million, suggesting growth of 16.6% from the year-ago period.
The consensus mark for non-GAAP earnings per share is pinned at 33 cents, suggesting a 37.5% year-over-year increase.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, the average surprise being 52%.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Sluggish demand across the overall factory automation market, particularly in Europe and the Americas, is expected to have negatively impacted the company’s overall quarterly financial performance. However, solid order activities across the consumer electronics and e-commerce markets are likely to offset the aforementioned negative impact.
Moreover, some deferrals of logistics revenues are expected to have kept margins under pressure. The company estimates gross margin to be around the mid-70s range.
Nonetheless, Cognex’s cost-cutting measures, including reducing travel, hiring and discretionary expenses, are anticipated to have somewhat offset the negative impact of the above-mentioned factors. During the first-quarter earnings call, management had mentioned its plans to cut operating expenses by more than 10% sequentially.
What Our Model Says
Our proven model does not predict an earnings beat for Cognex this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Cognex currently carries a Zacks Rank of 3 and has an Earnings ESP of -3.03%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Alphabet (GOOGL - Free Report) has an Earnings ESP of +7.40% and carries a Zacks Rank of 2, currently.
AMETEK, Inc. (AME - Free Report) has an Earnings ESP of +0.83% and currently carries a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
What's in Store for Cognex (CGNX) This Earnings Season?
Cognex Corporation (CGNX - Free Report) is set to report third-quarter 2020 results on Oct 28.
During its last earnings release, the company had issued a wider-than-usual guidance range for the third quarter citing the ongoing global uncertainty caused by COVID-19 pandemic.
Cognex projects third-quarter revenues to lie between $200 million and $220 million (mid-point $210million). The Zacks Consensus Estimate for revenues is pegged at $213.7 million, suggesting growth of 16.6% from the year-ago period.
The consensus mark for non-GAAP earnings per share is pinned at 33 cents, suggesting a 37.5% year-over-year increase.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, the average surprise being 52%.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Sluggish demand across the overall factory automation market, particularly in Europe and the Americas, is expected to have negatively impacted the company’s overall quarterly financial performance. However, solid order activities across the consumer electronics and e-commerce markets are likely to offset the aforementioned negative impact.
Cognex Corporation Price and Consensus
Cognex Corporation price-consensus-chart | Cognex Corporation Quote
Moreover, some deferrals of logistics revenues are expected to have kept margins under pressure. The company estimates gross margin to be around the mid-70s range.
Nonetheless, Cognex’s cost-cutting measures, including reducing travel, hiring and discretionary expenses, are anticipated to have somewhat offset the negative impact of the above-mentioned factors. During the first-quarter earnings call, management had mentioned its plans to cut operating expenses by more than 10% sequentially.
What Our Model Says
Our proven model does not predict an earnings beat for Cognex this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Cognex currently carries a Zacks Rank of 3 and has an Earnings ESP of -3.03%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +6.45% and flaunts a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alphabet (GOOGL - Free Report) has an Earnings ESP of +7.40% and carries a Zacks Rank of 2, currently.
AMETEK, Inc. (AME - Free Report) has an Earnings ESP of +0.83% and currently carries a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>