Intrinsic value of Cognex Corporation - CGNX

Previous Close

$50.10

  Intrinsic Value

$19.12

stock screener

  Rating & Target

str. sell

-62%

Previous close

$50.10

 
Intrinsic value

$19.12

 
Up/down potential

-62%

 
Rating

str. sell

We calculate the intrinsic value of CGNX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.11
  5.09
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
Revenue, $m
  852
  900
  950
  1,002
  1,057
  1,114
  1,174
  1,237
  1,302
  1,371
  1,443
  1,518
  1,597
  1,680
  1,767
  1,857
  1,953
  2,053
  2,157
  2,267
  2,383
  2,504
  2,630
  2,764
  2,903
  3,050
  3,204
  3,365
  3,535
  3,713
Variable operating expenses, $m
  564
  596
  628
  662
  698
  735
  774
  815
  858
  903
  940
  989
  1,041
  1,095
  1,151
  1,210
  1,273
  1,338
  1,406
  1,478
  1,553
  1,632
  1,714
  1,801
  1,892
  1,988
  2,088
  2,193
  2,304
  2,420
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  564
  596
  628
  662
  698
  735
  774
  815
  858
  903
  940
  989
  1,041
  1,095
  1,151
  1,210
  1,273
  1,338
  1,406
  1,478
  1,553
  1,632
  1,714
  1,801
  1,892
  1,988
  2,088
  2,193
  2,304
  2,420
Operating income, $m
  288
  304
  322
  340
  359
  379
  400
  422
  445
  468
  503
  529
  556
  585
  615
  647
  680
  715
  751
  790
  830
  872
  916
  963
  1,011
  1,062
  1,116
  1,172
  1,231
  1,293
EBITDA, $m
  313
  330
  349
  368
  388
  409
  431
  454
  478
  503
  530
  557
  586
  617
  649
  682
  717
  754
  792
  832
  875
  919
  966
  1,015
  1,066
  1,120
  1,176
  1,236
  1,298
  1,363
Interest expense (income), $m
  0
  0
  0
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  18
  19
  20
  22
  23
  25
  27
  28
Earnings before tax, $m
  288
  304
  321
  338
  357
  376
  397
  418
  440
  463
  497
  522
  549
  577
  606
  637
  669
  703
  738
  776
  815
  856
  899
  944
  991
  1,040
  1,093
  1,147
  1,205
  1,265
Tax expense, $m
  78
  82
  87
  91
  96
  102
  107
  113
  119
  125
  134
  141
  148
  156
  164
  172
  181
  190
  199
  209
  220
  231
  243
  255
  268
  281
  295
  310
  325
  341
Net income, $m
  210
  222
  234
  247
  261
  275
  290
  305
  321
  338
  363
  381
  401
  421
  443
  465
  488
  513
  539
  566
  595
  625
  656
  689
  723
  760
  798
  837
  879
  923

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  894
  944
  997
  1,052
  1,109
  1,169
  1,232
  1,298
  1,367
  1,439
  1,514
  1,593
  1,676
  1,763
  1,854
  1,949
  2,049
  2,154
  2,264
  2,379
  2,500
  2,627
  2,760
  2,900
  3,046
  3,200
  3,362
  3,531
  3,709
  3,896
Adjusted assets (=assets-cash), $m
  894
  944
  997
  1,052
  1,109
  1,169
  1,232
  1,298
  1,367
  1,439
  1,514
  1,593
  1,676
  1,763
  1,854
  1,949
  2,049
  2,154
  2,264
  2,379
  2,500
  2,627
  2,760
  2,900
  3,046
  3,200
  3,362
  3,531
  3,709
  3,896
Revenue / Adjusted assets
  0.953
  0.953
  0.953
  0.952
  0.953
  0.953
  0.953
  0.953
  0.952
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
  0.953
Average production assets, $m
  156
  165
  174
  183
  193
  204
  215
  226
  238
  251
  264
  278
  292
  307
  323
  340
  357
  376
  395
  415
  436
  458
  481
  506
  531
  558
  586
  616
  647
  679
Working capital, $m
  162
  171
  181
  190
  201
  212
  223
  235
  247
  260
  274
  288
  303
  319
  336
  353
  371
  390
  410
  431
  453
  476
  500
  525
  552
  579
  609
  639
  672
  705
Total debt, $m
  9
  18
  28
  38
  49
  60
  71
  83
  96
  109
  123
  137
  152
  168
  185
  202
  221
  240
  260
  281
  303
  326
  351
  376
  403
  431
  461
  492
  524
  559
Total liabilities, $m
  164
  173
  182
  192
  203
  214
  225
  237
  250
  263
  277
  292
  307
  323
  339
  357
  375
  394
  414
  435
  458
  481
  505
  531
  558
  586
  615
  646
  679
  713
Total equity, $m
  730
  771
  814
  859
  906
  955
  1,007
  1,060
  1,117
  1,175
  1,237
  1,302
  1,369
  1,440
  1,514
  1,592
  1,674
  1,760
  1,849
  1,944
  2,043
  2,146
  2,255
  2,369
  2,489
  2,615
  2,747
  2,885
  3,030
  3,183
Total liabilities and equity, $m
  894
  944
  996
  1,051
  1,109
  1,169
  1,232
  1,297
  1,367
  1,438
  1,514
  1,594
  1,676
  1,763
  1,853
  1,949
  2,049
  2,154
  2,263
  2,379
  2,501
  2,627
  2,760
  2,900
  3,047
  3,201
  3,362
  3,531
  3,709
  3,896
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.040
  0.050
  0.060
  0.070
  0.080
  0.090
  0.090
  0.100
  0.110
  0.110
  0.120
  0.120
  0.130
  0.130
  0.140
  0.140
  0.140
  0.150
  0.150
  0.160
  0.160
  0.160
  0.160
  0.170
  0.170
  0.170
  0.180
Adjusted equity ratio
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  210
  222
  234
  247
  261
  275
  290
  305
  321
  338
  363
  381
  401
  421
  443
  465
  488
  513
  539
  566
  595
  625
  656
  689
  723
  760
  798
  837
  879
  923
Depreciation, amort., depletion, $m
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  50
  52
  55
  58
  60
  63
  67
  70
Funds from operations, $m
  235
  248
  261
  275
  290
  305
  321
  337
  355
  373
  390
  410
  431
  453
  476
  500
  525
  552
  580
  609
  640
  672
  706
  741
  778
  817
  858
  901
  946
  993
Change in working capital, $m
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
Cash from operations, $m
  226
  239
  252
  265
  279
  294
  309
  326
  342
  360
  376
  396
  416
  437
  459
  483
  507
  533
  560
  588
  618
  649
  681
  716
  752
  789
  829
  870
  914
  960
Maintenance CAPEX, $m
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -60
  -63
  -67
New CAPEX, $m
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
Cash from investing activities, $m
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -38
  -39
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -74
  -78
  -82
  -86
  -90
  -94
  -100
Free cash flow, $m
  202
  214
  226
  238
  250
  264
  277
  292
  307
  323
  337
  355
  373
  392
  412
  433
  455
  478
  502
  527
  554
  582
  611
  642
  674
  708
  743
  780
  819
  860
Issuance/(repayment) of debt, $m
  9
  9
  10
  10
  11
  11
  11
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  34
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  9
  9
  10
  10
  11
  11
  11
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  34
Total cash flow (excl. dividends), $m
  212
  223
  235
  248
  261
  275
  289
  304
  320
  336
  351
  369
  388
  408
  428
  450
  473
  497
  522
  548
  576
  605
  635
  667
  701
  736
  773
  811
  852
  894
Retained Cash Flow (-), $m
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -71
  -74
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -132
  -138
  -145
  -153
Prev. year cash balance distribution, $m
  444
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  617
  182
  192
  203
  214
  226
  238
  250
  263
  277
  289
  304
  320
  337
  354
  372
  391
  411
  432
  454
  477
  501
  527
  553
  581
  610
  641
  673
  707
  742
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  591
  167
  167
  167
  166
  164
  161
  156
  151
  145
  137
  130
  122
  113
  104
  95
  85
  76
  67
  58
  49
  42
  35
  28
  23
  18
  14
  10
  8
  6
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Cognex Corporation (Cognex) is a provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. The Company operates through the machine vision technology segment. The Company's machine vision products are used to automate the manufacture and tracking of discrete items, such as mobile phones, aspirin bottles and automobile tires, by locating, identifying, inspecting and measuring them during the manufacturing or distribution process. The Company's products include vision software, vision systems, vision sensors and identification (ID) products. Its products range from vision sensors that are integrated, to personal computer (PC)-based systems for users. Its products also have a range of physical forms, depending upon the user's need. Cognex sells its products through a direct sales force, as well as through a global network of integration and distribution partners.

FINANCIAL RATIOS  of  Cognex Corporation (CGNX)

Valuation Ratios
P/E Ratio 57.4
Price to Sales 16.5
Price to Book 8.9
Price to Tangible Book
Price to Cash Flow 47.3
Price to Free Cash Flow 51
Growth Rates
Sales Growth Rate 15.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55.2%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 15.6%
Ret/ On Assets - 3 Yr. Avg. 17.7%
Return On Total Capital 16.8%
Ret/ On T. Cap. - 3 Yr. Avg. 19.4%
Return On Equity 16.8%
Return On Equity - 3 Yr. Avg. 19.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 77.7%
Gross Margin - 3 Yr. Avg. 77.6%
EBITDA Margin 35.3%
EBITDA Margin - 3 Yr. Avg. 33.5%
Operating Margin 30.9%
Oper. Margin - 3 Yr. Avg. 29.3%
Pre-Tax Margin 32.4%
Pre-Tax Margin - 3 Yr. Avg. 30.5%
Net Profit Margin 28.8%
Net Profit Margin - 3 Yr. Avg. 32.9%
Effective Tax Rate 11.2%
Eff/ Tax Rate - 3 Yr. Avg. 14%
Payout Ratio 16.7%

CGNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CGNX stock intrinsic value calculation we used $806 million for the last fiscal year's total revenue generated by Cognex Corporation. The default revenue input number comes from 0001 income statement of Cognex Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CGNX stock valuation model: a) initial revenue growth rate of 5.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CGNX is calculated based on our internal credit rating of Cognex Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Cognex Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CGNX stock the variable cost ratio is equal to 66.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CGNX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Cognex Corporation.

Corporate tax rate of 27% is the nominal tax rate for Cognex Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CGNX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CGNX are equal to 18.3%.

Life of production assets of 9.7 years is the average useful life of capital assets used in Cognex Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CGNX is equal to 19%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1135.263 million for Cognex Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 170.745 million for Cognex Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Cognex Corporation at the current share price and the inputted number of shares is $8.6 billion.

RELATED COMPANIES Price Int.Val. Rating
CYBE CyberOptics Co 18.82 21.57  hold
DHR Danaher Corpor 129.69 98.24  sell
FTV Fortive Corpor 82.23 87.04  hold
PRCP Perceptron, In 7.58 12.26  str.buy
SCKT Socket Mobile, 2.00 4.71  str.buy
NOVT Novanta Inc. 82.97 32.41  str.sell
MKSI MKS Instrument 90.77 115.00  buy
AME AMTEK, Inc. 79.41 94.29  hold

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.