The long-term growth story at machine vision company Cognex (NASDAQ: CGNX) is still intact, but investors are going to have to be patient before they see it in the hard numbers. That's the key takeaway from the company's first-quarter earnings report as the COVID-19 pandemic has derailed the idea that 2020 would see a resumption of Cognex's long-term growth trend.
The pandemic is the last thing investors needed to see after a 2019 characterized by weakness in Cognex's key end markets. The company has generated more than 50% of its sales from automotive and consumer electronics in recent years, so when automotive and smartphone sales declined in 2019, Cognex got hit hard. For reference, machine vision is simply the process where imaging technology is used to monitor, inspect and guide automated processes. For example, Cognex's systems can help eliminate defects in automotive production or identify barcodes in e-commerce warehouses.