Cognex Corporation
CGNX Details
Cognex Corporation (NASDAQ: CGNX) is a global manufacturer and marketer of machine vision solutions that assist businesses with automating their manufacturing and distribution processes. It also provides maintenance and support and consulting and training services. CGNX's key products comprise machine vision systems and sensors, vision software, and image-based barcode scanners (ID devices).
Latest News:
- Quarterly Dividend: On November 04, 2021, CGNX declared a quarterly dividend of USD 0.065 per common share (representing sequential growth of USD 0.005 per share), which was paid on December 03, 2021, to shareholders of record on November 19, 2021.
Q3FY21 Results:
- Growth in Revenue: The company reported YoY growth of 13.45% in revenues to USD 284.85 million in Q3FY21 (ended October 03, 2021) compared to USD 251.07 million in Q3FY20 (ended September 27, 2020), owing to61% YoY growth in Standard products and services segment.
- Decline in Profitability: CGNX witnessed a decrease in net income to USD 78.90 million in Q3FY21 vs. USD 87.51 million in Q3FY20.
- Cash and Debt Position: As of October 03, 2021, the company had cash and cash equivalents (including marketable securities) of USD 392.59 million and no outstanding debt.
Key Risks:
- Customer Concentration Risk: Most of CGNX's revenue is concentrated with a limited number of customers. For example, in FY20, its top two customers represented a significant portion of its revenue. Hence, the loss of any of these key customers could harm its financials.
- Intense Competition: CGNX operates in a highly competitive machine vision industry with direct price competition from significant players. Should this trend continue, it could adversely impact the company's financials.
Outlook:
- Q4FY21 Estimate: As of Q3FY21, CGNX expects to clock revenue of USD 210 – 230 million in Q4FY21, along with a gross margin in the low-70% range.
Valuation Methodology: Price/Earnings Multiple Based Relative Valuation
(Analysis by Kalkine Group)
- % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
CGNX Daily Technical Chart (Source: REFINITIV)
Stock Recommendation:
CGNX's share price has decreased 3.81% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 72.52 to USD 101.82. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 38.00. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 86.34.
Considering the company's growth prospects, solid margins, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 75.33, up 0.15% as of December 06, 2021, 11:42 AM ET.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.
Kinross Gold Corporation
KGC Details
Kinross Gold Corporation (NYSE: KGC) is a Canada-based gold mining company focused on gold mining and related activities such as exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties. It has mining operations in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania. As of December 06, 2021, the company's market capitalization stood at USD 7.31 billion.
Latest News:
- Quarterly Dividend: On November 10, 2021, the company declared a quarterly cash dividend of USD 0.03 per common share, payable on December 15, 2021, to shareholders of record on December 01, 2021.
- Share Repurchase Program: On July 28, 2021, KGC received approval from the Toronto Stock Exchange (TSX) to commence the Normal Course Issuer Bid (NCIB) program, which authorizes the company to buyback 63.10 million of its common shares, representing 5% of the total 1.25 billion shares outstanding as of July 27, 2021, during the period beginning August 03, 2021, to August 02, 2022. As of November 10, 2021, KGC has repurchased 8.6 million common shares for USD 50.0 million.
Q3FY21 Results:
- Decline in Topline: The company reported a YoY decrease of 23.76% increase in total revenue to USD 862.5 million in Q3FY21 (ended September 30, 2021) compared to USD 1.13 billion in Q3FY20, attributable to a decline in sales volume and average realized gold price.
- Incurred Losses: KGC reported a net loss of USD 45.9 million in Q3FY21 vs. a net income of USD 241.6 million in Q3FY21.
- Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 586.10 million and total debt of USD 1.49 billion.
Key Risks:
- Metal Price Risk: The highly unpredictable and uncontrollable prices of gold and silver on the global market substantially impact KGC's business. As a result, any adverse price movement could harm the company's financial performance.
- Regulatory Risk: KGC operates as a gold mining company subject to several federal and state regulations. As a result, stricter regulations or non-compliance with required laws could harm the company's profitability.
Outlook:
- Production Guidance: KGC expects to meet its updated production guidance of 2.1 million gold eq. oz. (+/- 5%) in FY21 with subsequent growth to 2.7 million gold eq. oz. (+/- 5%) and 2.9 million gold eq. oz. (+/- 5%) in FY22 and FY23, respectively.
- Capital Expenditure: KGC expects to incur a capital expenditure of USD 900 million (+/- 5%) in FY21.
Valuation Methodology: Price/Cash Flow-Based Relative Valuation
(Analysis by Kalkine Group)
- % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
KGC Daily Technical Chart (Source: REFINITIV)
Stock Recommendation:
KGC's share price has declined 4.04% in the past three months and is currently leaning towards the lower band of its 52-week range of USD 5.18 to USD 8.34. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 40.45. We have valued the stock using the Price/Cash Flow-based relative valuation methodology and arrived at a target price of USD 6.54.
Considering the correction in the stock price in the past three months, decent balance sheet, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the closing price of USD 5.94, up 1.71% as of December 06, 2021.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.
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