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Q1 Rundown: Cognex (NASDAQ:CGNX) Vs Other Specialized Technology Stocks
Q1 Rundown: Cognex (NASDAQ:CGNX) Vs Other Specialized Technology Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Cognex (NASDAQ:CGNX) and the rest of the specialized technology stocks fared in Q1.
Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.
The 8 specialized technology stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Luckily, specialized technology stocks have performed well with share prices up 16% on average since the latest earnings results.
Cognex (NASDAQ:CGNX)
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ:CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Cognex reported revenues of $216 million, up 2.5% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates.
"Reflecting on my 17-year tenure at Cognex, I am extremely proud of what we have accomplished as a team, increasing revenue fivefold to over $900 million in 2024, driven by an unwavering dedication to innovation and excellence," Mr. Willett commented.
Cognex Total Revenue
Interestingly, the stock is up 17.6% since reporting and currently trades at $32.08.
Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE:ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.
Arlo Technologies reported revenues of $119.1 million, down 4.1% year on year, outperforming analysts’ expectations by 0.6%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates.
Arlo Technologies Total Revenue
The market seems happy with the results as the stock is up 26.5% since reporting. It currently trades at $13.48.
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Zebra reported revenues of $1.31 billion, up 11.3% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS guidance for next quarter estimates.
Interestingly, the stock is up 22.9% since the results and currently trades at $299.30.
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE:MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Mirion reported revenues of $202 million, up 4.9% year on year. This number beat analysts’ expectations by 0.6%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.
The stock is up 12.7% since reporting and currently trades at $17.55.
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
PAR Technology reported revenues of $103.9 million, up 48.2% year on year. This print lagged analysts' expectations by 1.4%. Zooming out, it was a mixed quarter as it also produced an impressive beat of analysts’ EPS estimates but a miss of analysts’ ARR estimates.
PAR Technology pulled off the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is up 11.5% since reporting and currently trades at $69.58.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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