Cognex Corporation (CGNX): fair value, margin of safety and Wheel Score

Is CGNX undervalued?

CGNX closed at 55.67 on 16 Oct 2026, more than 30% above the GLS average fair value of 17.47. Only 0 of the 9 models that produced a value sit above the price. By our models the shares are priced well beyond what the filed earnings, cash flow and book value support; the Sunday Scan drops names like this at the "below fair value" rule.

The 9 models disagree widely: GLS Growth gives 3.06 while 10 Cap gives 42.31. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files CGNX under Blend.

Nine valuation models for CGNX

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

On financial health CGNX scores 8/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is low at 4.8 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are moderate - ROIC 7.3%, ROE 7.7%, ROA 5.7% - with debt at 0.05 times equity and a free-cash-flow yield of 2.9%.

The dividend yield is 0.61% with a payout ratio of 32% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Standard Products and Services 85%, Application Specific Customer Solutions 15% (quarter Q2 FY2026).

Institutional ownership scores 10/10, insider activity 7/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 63: Fair

CGNX scores 63 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 0/25, Health 18/20, Moat 7/15, Premium 20/20, Stability 19/20. Value (0/25) is where the points are missing.

Implied volatility is 62% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (20 of 20) because volatility this high usually comes with a reason. Chain open interest is 15,604 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 3.9M shares a day on a market cap of $9.4B, with a beta of 1.48 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 19 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

Cognex Corporation reports earnings on 28 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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