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Varex Imaging
(NASDAQ:VREX)
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Rating:57Neutral
Price Target:
$19.00
▲(2.70% Upside)
Action:Reiterated
Date:10/29/26
The score is led by mixed financial performance: profitability has returned, but negative free cash flow and weak cash conversion are key near-term risks. Technicals are mildly supportive with improved intermediate-term trend, while valuation is a headwind given the ~35 P/E. Corporate events add some support due to the pending all-cash acquisition, but regulatory and legal contingencies temper the benefit.
Positive Factors
Installed-base demand
Replacement demand tied to the installed base gives Varex a recurring component revenue stream beyond new equipment shipments. This supports business durability because customers require tubes and related parts through service cycles, while detector and software sales add exposure to upgrades and new system builds.
Negative Factors
Weak cash conversion
Recent cash generation is materially weaker than accounting profitability, reducing the funds available for investment, debt reduction, and resilience during demand fluctuations. The swing from strong 2023 free cash flow to a TTM outflow indicates that working-capital, capital-spending, or other cash demands require close monitoring.
Read all positive and negative factors
Positive Factors
Negative Factors
Installed-base demand
Replacement demand tied to the installed base gives Varex a recurring component revenue stream beyond new equipment shipments. This supports business durability because customers require tubes and related parts through service cycles, while detector and software sales add exposure to upgrades and new system builds.
Read all positive factors
Varex Imaging (VREX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$783.45M
Dividend YieldN/A
Average Volume (3M)549.06K
Price to Earnings (P/E)35.1
Beta (1Y)2.23
Revenue Growth5.31%
EPS GrowthN/A
CountryUS
Employees2,500
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.53
Shares Outstanding42,463,448
10 Day Avg. Volume564,911
30 Day Avg. Volume549,063
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)1.05
Price to Sales (P/S)0.59
P/FCF Ratio26.29
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue0.86
Enterprise Value/Gross Profit2.51
Enterprise Value/Ebitda7.94
Forecast
1Y Price Target
$18.93Price Target Upside2.30% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.07
Revenue Forecast (FY)$898.95M
Varex Imaging Business Overview & Revenue Model
Company Description
Varex Imaging Corporation (VREX) specializes in the development and production of X-ray imaging components. Its operations are divided into two primary divisions: Medical and Industrial. Within the Medical segment, Varex provides a comprehensive r...
How the Company Makes Money
Varex primarily makes money by selling imaging components and subsystems—most notably X-ray tubes and flat panel detectors—to OEM customers that build complete imaging systems for hospitals, clinics, and industrial inspection markets. Revenue is g...
Varex Imaging Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 24, 2026
Earnings Call Sentiment Neutral
The call highlighted solid execution on guidance, margin resilience (non‑GAAP gross margin at the high end), successful debt refinancing and clear technology and industrial pipeline momentum (CT, photon-counting, cargo systems). Offsetting these positives are modest top‑line growth (+1% YoY), a GAAP loss, margin erosion versus the prior year (down ~240 bps), elevated inventory and short‑term working capital pressures. Management provided multi-quarter visibility (annual guidance) and actions (India ramp, pricing/contract renewal levers) that could improve margins over time, but near-term growth and margin recovery remain modest.Positive Updates
Revenue Within Guidance and Continued Demand
Q2 revenue of $216 million came in within guidance; total revenue increased 1% year-over-year, driven by medical (+2%) and industrial (+1%). Medical represented $156M (72% of total) and Industrial $60M (28%).
Negative Updates
Modest Top-Line Growth and Geographic Weakness
Overall revenue growth was modest at +1% YoY; EMEA sales declined 16% YoY, and company acknowledged lumpy industrial shipment patterns tied to prior-year large orders.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Within Guidance and Continued Demand
Q2 revenue of $216 million came in within guidance; total revenue increased 1% year-over-year, driven by medical (+2%) and industrial (+1%). Medical represented $156M (72% of total) and Industrial $60M (28%).
Read all positive updates
Company Guidance
Varex guided that second‑half fiscal 2026 revenue should be up roughly 3% year‑over‑year (guidance excludes any IEEPA tariff refund) and reiterated full‑year fiscal 2026 revenues of $860–$880 million with non‑GAAP EPS of $0.80–$1.00; Q3 guidance is $210–$225 million of revenue and non‑GAAP diluted EPS of $0.15–$0.30, based on non‑GAAP gross margin of 33–34%, non‑GAAP operating expenses of about $54 million, net interest and other expense of $6–$7 million, a Q3 tax rate of ~23% (full‑year tax expectation ~20%), and roughly 42 million diluted non‑GAAP shares outstanding, and management said it will resume providing annual guidance going forward.Varex Imaging Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 865.00M | 844.60M | 811.00M | 893.40M | 859.40M | 818.10M |
| Gross Profit | 296.90M | 290.50M | 256.90M | 290.30M | 283.50M | 271.50M |
| EBITDA | 93.90M | 3.50M | 62.90M | 94.70M | 114.50M | 104.50M |
| Net Income | 22.10M | -70.30M | -47.70M | 48.20M | 30.30M | 17.40M |
Balance Sheet | ||||||
| Total Assets | 1.10B | 1.11B | 1.22B | 1.25B | 1.18B | 1.15B |
| Cash, Cash Equivalents and Short-Term Investments | 99.20M | 155.10M | 200.50M | 193.90M | 89.40M | 144.60M |
| Total Debt | 373.60M | 401.90M | 470.40M | 469.80M | 436.40M | 459.40M |
| Total Liabilities | 589.50M | 620.80M | 667.80M | 668.60M | 637.70M | 651.00M |
| Stockholders Equity | 496.60M | 472.60M | 535.10M | 567.70M | 533.40M | 483.30M |
Cash Flow | ||||||
| Free Cash Flow | -20.20M | 18.80M | 20.40M | 87.70M | -4.40M | 77.50M |
| Operating Cash Flow | 11.30M | 41.70M | 47.30M | 108.40M | 16.90M | 92.60M |
| Investing Cash Flow | -17.80M | 10.30M | -27.50M | -44.90M | -48.40M | -16.20M |
| Financing Cash Flow | -31.00M | -75.90M | -3.30M | -200.00K | -23.80M | -32.30M |
Varex Imaging Technical Analysis
Positive
18.50
Price Trends
18.47
Negative
15.19
Positive
13.55
Positive
Market Momentum
0.08
Positive
62.49
Neutral
56.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VREX, the sentiment is Positive. The current price of 18.5 is above the 20-day moving average (MA) of 18.44, above the 50-day MA of 18.47, and above the 200-day MA of 13.55, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 62.49 is Neutral, neither overbought nor oversold. The STOCH value of 56.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VREX.
Varex Imaging Risk Analysis
Varex Imaging disclosed 36 risk factors in its most recent earnings report. Varex Imaging reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Varex Imaging Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $34.25B | 19.64 | 16.14% | 0.19% | 6.87% | -2.26% | |
65 Neutral | $26.27B | 20.72 | 10.05% | 3.66% | ― | ― | |
59 Neutral | $9.45B | -88.70 | -2.92% | 0.32% | 1.65% | -233.85% | |
57 Neutral | $783.45M | 35.14 | 4.60% | ― | 5.31% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
45 Neutral | $15.66M | -0.33 | -99.04% | ― | -12.34% | -2363.03% | |
44 Neutral | $25.25M | -0.19 | -94.35% | ― | 31.52% | -89.07% |
* Healthcare Sector Average
VREX
Varex Imaging
18.45
6.43
53.49%
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NNOX
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0.32
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75.82
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Varex Imaging Corporate Events
M&A TransactionsShareholder Meetings
Varex Shareholders Approve Merger with Teledyne Technologies
Positive
Oct 29, 2026
On October 28, 2026, Varex Imaging held a special meeting of stockholders to vote on proposals tied to its August 10, 2026 merger agreement with Teledyne Technologies, under which Varex would be acquired via a merger and become a wholly owned subs...
Legal ProceedingsM&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
Varex Imaging issues supplemental disclosures amid merger lawsuits
Negative
Oct 22, 2026
On August 10, 2026, Varex Imaging agreed to be acquired by Teledyne Technologies via a merger that would make Varex a wholly owned subsidiary, with shareholders to vote on the deal at a virtual special meeting scheduled for October 28, 2026. Since...
Business Operations and StrategyDelistings and Listing ChangesM&A Transactions
Varex Imaging Agrees to Teledyne All-Cash Acquisition
Positive
Aug 10, 2026
On August 10, 2026, Varex Imaging entered into a definitive merger agreement under which Teledyne Technologies will acquire all outstanding Varex shares for $18.90 in cash per share, valuing the deal at about $1.1 billion including equity awards a...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.