Cognex offers 'outstanding margin and cash flow profile', says DA Davidson
DA Davidson analyst analyst Matt Summerville says Cognex shares offer an attractive investment opportunity for long-term investors, as the company is "well positioned to achieve strong, double-digit, organic growth - with plentiful secular runway in a growing addressable market". The analyst also cites its "debt-free balance sheet, outstanding gross margins, and strong free cash flow profile". In the near term, Summerville keeps his Neutral rating and $57 price target on Cognex with organic comps "particularly challenging" this year and the toughest compares still to come in Q3. The analyst adds that its valuation at 27.5-times enterprise value to expected FY19 EBITDA relative to 20-30-times historical range is "fair".