Contrasting Cognex (NASDAQ:CGNX) and Latch (NASDAQ:LTCH)

Latch (NASDAQ:LTCH) and Cognex (NASDAQ:CGNX) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Insider and Institutional Ownership

0.4% of Latch shares are held by institutional investors. Comparatively, 88.1% of Cognex shares are held by institutional investors. 21.9% of Latch shares are held by insiders. Comparatively, 1.7% of Cognex shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Latch and Cognex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Latch	$48.39 million	0.58	-$162.34 million	($0.31)	-0.55
Cognex	$994.36 million	10.64	$114.44 million	$1.03	61.07

Cognex has higher revenue and earnings than Latch. Latch is trading at a lower price-to-earnings ratio than Cognex, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Latch and Cognex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Latch	N/A	N/A	N/A
Cognex	16.05%	13.50%	10.02%

Volatility and Risk

Latch has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Cognex has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Latch and Cognex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Latch	0	0	0	0	0.00
Cognex	0	5	10	2	2.82

Cognex has a consensus price target of $75.64, indicating a potential upside of 20.26%. Given Cognex’s stronger consensus rating and higher possible upside, analysts plainly believe Cognex is more favorable than Latch.

Summary

Cognex beats Latch on 14 of the 15 factors compared between the two stocks.

About Latch

Latch, Inc. operates as an enterprise technology company in the United States and Canada. The company offers LatchOS, an operating system that extends smart access, delivery and guest management, smart home and sensors, connectivity, and personalization and services. Its software products include Latch Resident Mobile Applications, Latch Manager Web, and the Latch Manager Mobile Applications. The company also offers hardware devices that include M, C, and R series door-mounted access control products; Latch Intercom, which integrates into the Latch core access systems and allows audio and video calls for remote unlocking; Latch Camera, a dome camera; Latch Hub, a connectivity solution that enables smart access, smart home, and sensor devices at various buildings; and Latch Leak Detector, a solution to enable leak prevention, detection, and resolution for building owners and residents. In addition, it provides NFC unlock on Android that allows the user to unlock their door without even opening their phone; Latch Visitor Express, a contactless visitor entry system; and LatchID, an identification system. The company is headquartered in New York, New York.

About Cognex

Cognex Corporation provides machine vision products that capture and analyze visual information to automate manufacturing and distribution tasks worldwide. Its machine vision products are used to automate the manufacturing and tracking of discrete items, including mobile phones, electric vehicle batteries, and e-commerce packages by locating, identifying, inspecting, and measuring them during the manufacturing or distribution process. The company offers VisionPro software, a suite of patented vision tools for advanced programming; QuickBuild that allows customers to build vision applications with a graphical, flowchart-based programming interface; and Cognex deep learning vision software. It also provides a range of inspection tasks, including part location, identification, measurement, assembly verification, and robotic guidance; vision sensors for vision applications, such as checking the presence and size of parts; and the In-Sight product line of vision systems and sensors. In addition, the company offers DataMan, an image-based barcode readers and barcode verifiers. It sells its products to automotive, logistics, consumer electronics, medical-related, semiconductor, consumer products, food and beverage, and others, as well as through a network of distributors and integrators. The company was incorporated in 1981 and is headquartered in Natick, Massachusetts.