Investors in machine vision company Cognex (NASDAQ: CGNX) were dealt a blow following the release of the company's first-quarter earnings. The stock fell sharply afterward and is now down a whopping 38%. While there are good reasons for a realignment in the valuation following adverse events this year, it seems unlikely that anything has happened to reduce the company's long-term earnings potential by nearly 40%. So does that mean Cognex is a good value stock right now? Let's take a look.
Recapping the key events from the first-quarter earnings , it wasn't so much that the earnings were terrible in themselves. Instead, the market took umbrage with management's guidance for the second quarter and commentary on trading conditions in 2022. The second-quarter guidance for revenue of $265 million to $285 million came in lower than the market's previous estimate of $293 million. In addition, the guidance for gross margin in the low 70% range is below the company's target of mid-70%.
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