Finance
Engaged Capital urges cost cutting at Cognex to boost share price
Published by Global Banking & Finance Review®
Posted on October 21, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 21, 2025
2 min readLast updated: January 21, 2026
Engaged Capital pushes Cognex for cost reductions, aiming to double stock value. New management and AI advancements are key focus areas.
By Svea Herbst-Bayliss
NEW YORK (Reuters) -Activist investor Engaged Capital has built a sizable stake in Cognex and is urging the maker of machine vision systems to cut costs and use cost consultants, arguing this could help the stock price nearly double in the next two years.
"This is an AI company without the AI valuation," Engaged's founder and chief investment officer Glenn Welling said on Tuesday at the 13D Monitor Active-Passive Investment Summit in New York.
Welling did not disclose the size of Engaged's stake in Cognex but called it one of the hedge fund's biggest positions. A recent regulatory filing showed that Engaged had roughly $700 million in assets.
Cognex's smart cameras and bar code readers are used by customers including retailer Amazon and car maker BMW for purposes such as spotting defects in packaging or scratches in doors.
The company, which has a market valuation of $7.7 billion, has seen its stock price tumble some 50% from its all-time high four years ago.
Now with new management at the helm - CEO Matt Moschner was appointed earlier this year and CFO Dennis Fehr was named to the position in 2024 - Welling said he is confident significant improvements can be made to drive revenue, profit and ultimately the share price higher. Cognex's share price traded at $47.64 at the start of the week.
Last year, the company reported margins of 17% but Welling said those could be closer to 40% with changes to the company's overall spending, particularly on its research and development side where it could cut back on projects with low returns.
Cognex's main competitor, Japanese company Keyence, boasts margins of 53%.
The company has also reengineered some products and with the help of artificial intelligence they are easier to install and operate, opening up a new potential field of customers, he said.
Welling said Engaged has had constructive discussions with Cognex and introduced the management to cost-cutting consultants who have been involved with other Engaged target companies.
(Reporting by Svea Herbst-Bayliss; Editing by Nia Williams)
An activist investor is an individual or group that purchases a significant stake in a company to influence its management and operations, often pushing for changes to increase shareholder value.
Market valuation refers to the total value of a company's outstanding shares of stock, representing its market capitalization, which reflects the company's perceived worth in the market.
Profit margins are financial metrics that show the percentage of revenue that exceeds the costs of goods sold, indicating how efficiently a company is managing its expenses relative to its sales.
Artificial intelligence (AI) is the simulation of human intelligence processes by machines, particularly computer systems, enabling them to perform tasks such as learning, reasoning, and problem-solving.
Cost-cutting refers to the strategies and actions taken by a company to reduce its expenses and improve profitability, often involving reductions in operational costs or workforce.
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