Why Shares of Cognex Corp. Jumped Today

Image Source: Cognex Corp.
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What: Shares of Cognex Corp. (NASDAQ: CGNX), a provider of machine vision systems, soared on Tuesday following the company's second-quarter report. Cognex beat analyst estimates on all fronts and provided guidance calling for significant year-over-year revenue growth during the third quarter. At 11:00 a.m. EDT, the stock was up about 16%.
So what: Cognex reported second-quarter revenue of $147.3 million, up 2.4% year over year and $9 million higher than analysts were expecting. The company pointed to better-than-expected results from the consumer electronics, automotive, and logistics industries as the main driver behind its revenue growth.
EPS from continuing operations came in at $0.50, up from $0.49 during the prior-year period and $0.07 higher than the average analyst estimate. Despite the EPS growth, operating income declined slightly year over year due to a lower gross margin.
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Now what: With Cognex reporting better-than-expected results and guiding for a significant jump in revenue next quarter, it's no surprise that investors are pushing the stock price higher. Tuesday's jump created a new 52-week high, pushing the stock above levels reached last year. The stock now trades at a premium, about 43 times the average analyst estimate for 2016 earnings. But strong results and guidance was enough to convince investors to pay up for the stock.
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