Earnings

Which is more compelling pick right now? – Cognex Corporation (CGNX), Supernus Pharmaceuticals, Inc. (SUPN)

The shares of Cognex Corporation have decreased by more than -23.54% this year alone. The shares recently went down by -3.13% or -$1.51 and now trades at $46.76. The shares of Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), has jumped by 41.78% year to date as of 05/17/2018. The shares currently trade at $56.50 and have been able to report a change of 13.23% over the past one week.

The stock of Cognex Corporation and Supernus Pharmaceuticals, Inc. were two of the most active stocks on Thuday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Next 5Y EPS Growth: 27.40% versus 31.00%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that CGNX will grow it’s earning at a 27.40% annual rate in the next 5 years. This is in contrast to SUPN which will have a positive growth at a 31.00% annual rate. This means that the higher growth rate of SUPN implies a greater potential for capital appreciation over the years.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. CGNX has an EBITDA margin of 35.18%, this implies that the underlying business of SUPN is more profitable. The ROI of CGNX is 25.90% while that of SUPN is 24.50%. These figures suggest that CGNX ventures generate a higher ROI than that of SUPN.

Cash Flow



The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, CGNX’s free cash flow per share is a positive 0, while that of SUPN is positive 0.01.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for CGNX is 5.90 and that of SUPN is 4.90. This implies that it is easier for CGNX to cover its immediate obligations over the next 12 months than SUPN. The debt ratio of CGNX is 0.00 compared to 0.90 for SUPN. SUPN can be able to settle its long-term debts and thus is a lower financial risk than CGNX.

Valuation

CGNX currently trades at a forward P/E of 29.99, a P/B of 7.52, and a P/S of 10.30 while SUPN trades at a forward P/E of 21.23, a P/B of 8.27, and a P/S of 8.69. This means that looking at the earnings, book values and sales basis, CGNX is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions




The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of CGNX is currently at a -25.6% to its one-year price target of 62.85. Looking at its rival pricing, SUPN is at a 5.27% relative to its price target of 53.67.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), CGNX is given a 2.50 while 1.80 placed for SUPN. This means that analysts are more bullish on the outlook for CGNX stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for CGNX is 4.09 while that of SUPN is just 6.18. This means that analysts are more bullish on the forecast for CGNX stock.

Conclusion

The stock of Cognex Corporation defeats that of Supernus Pharmaceuticals, Inc. when the two are compared, with CGNX taking 6 out of the total factors that were been considered. CGNX happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, CGNX is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CGNX is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

A Side-by-side Analysis of Cognizant Technology So... Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shares are up more than 2.34% this year and recently increased 1.58% or $1.13 to settle at $7...
Choosing Between Under Armour, Inc. (UAA) and V.F.... Under Armour, Inc. (NYSE:UAA) shares are down more than -1.52% this year and recently increased 3.72% or $0.51 to settle at $14.21. V.F. Corporation (...
Should You Buy Opko Health, Inc. (OPK) or Illumina... Opko Health, Inc. (NASDAQ:OPK) shares are down more than -45.91% this year and recently increased 1.82% or $0.09 to settle at $5.03. Illumina, Inc. (N...
Automatic Data Processing, Inc. (ADP) and F5 Netwo... Automatic Data Processing, Inc. (NASDAQ:ADP) shares are up more than 12.78% this year and recently decreased -0.04% or -$0.05 to settle at $115.87. F5...
Gulfport Energy Corporation (GPOR) vs. SM Energy C... Gulfport Energy Corporation (NASDAQ:GPOR) shares are down more than -41.40% this year and recently decreased -7.98% or -$1.1 to settle at $12.68. SM E...