In Q4 2025 Cognex boosted its adjusted EBITDA guidance range to 25-31% through the cycle and aims for a 25% run-rate by end-2026. This improvement is underpinned by $35-$40 million in identified operating expense reductions and the planned exit of $22 million in lower-margin revenues starting H2 2026.

Cognex expects free cash flow conversion exceeding 100% in 2026, supported by a cash and investments balance of $642 million and zero debt at year-end 2025. The company repurchased $25 million of shares and paid $14 million in dividends in Q4, while authorizing an additional $500 million share repurchase and maintaining an 8.5 cent quarterly dividend.

Organic revenue growth is projected in the mid- to high-single digits across multiple verticals rather than relying on one cycle. Consumer electronics is forecast for high-single- to double-digit growth, automotive for flat to low-single-digit growth, and semiconductor growth weighted toward the second half of 2026.

Cognex shares have surged 33.9% over the past three months, outperforming peers including OSI Systems (+4.5%). The stock trades at a P/E of 39.4 versus the sector’s 24.7 and OSI Systems’ 24.5, reflecting strong momentum but a potentially stretched valuation.