Is Cognex Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Cognex Corp. has moved from attractive to expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on key metrics, including a P/E ratio of 44, an EV to EBITDA ratio of 30.68, and a PEG ratio of 2.42. In comparison to peers, Cognex's P/E ratio is significantly higher than Onto Innovation, Inc. at 20.49 and Sensata Technologies Holding Plc at 12.23, both of which are deemed fairly valued.
Recent stock performance shows that Cognex has outperformed the S&P 500 over the past week and month, with returns of 12.90% and 4.45%, respectively, but it has lagged significantly over longer periods, such as the 3-year and 5-year returns, where it posted only 5.94% and -33.16% compared to the S&P 500's 81.19% and 91.29%. This suggests that while the stock may have short-term momentum, its long-term valuation appears unsustainable.