Varex Imaging (VREX) AI Stock Analysis

• Market Cap: $446.65M
• Dividend Yield: N/A
• Average Volume (3M): 297.70K
• Price to Earnings (P/E): 52.9
• Beta (1Y): 2.24
• Revenue Growth: 4.14%
• EPS Growth: -45.29%
• Country: US
• Employees: 2,300
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 0.19
• Shares Outstanding: 41,900,000
• 10 Day Avg. Volume: 224,850
• 30 Day Avg. Volume: 297,697
• PEG Ratio: -0.16
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 0.59
• P/FCF Ratio: 26.29
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 2.50
• Enterprise Value/Ebitda: 95.88
• 1Y Price Target: $20.00
• Price Target Upside: 47.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.85
• Revenue Forecast (FY): $867.66M

• Rating: 46 Neutral
• Price Target: $10.50 ▼(-22.74% Downside)
• Action: Reiterated Date: 03/16/26
• Date: Action: Reiterated 03/16/26

The score is held down primarily by weakened financial performance (swing to losses and negative TTM free cash flow) and bearish technicals (below key moving averages with negative MACD). A high P/E further pressures the outlook, partially offset by a constructive earnings call with improving non-GAAP results and a positive debt refinancing that reduces interest and refinancing risk.

Positive Factors

Revenue growth & Industrial momentum

Sustained top-line expansion and double‑digit Industrial growth broaden the installed base and validate product-market fit. Durable revenue gains support scale economics, R&D investment and improved bargaining with OEMs, reducing dependence on any single end market over the medium term.

Diversified product mix and OEM integration

A broad portfolio of consumable X‑ray tubes, detectors and subsystem components creates recurring aftermarket streams and multi‑year design relationships with OEMs. Engineered-in components and replacement demand produce predictable revenue backlogs and higher customer switching costs over time.

Refinancing improves financial flexibility

Replacing high‑coupon 2027 notes with a secured facility, hedged SOFR to a fixed rate and extended maturities materially reduces near‑term refinancing risk and interest expense. That structural improvement increases liquidity headroom to fund capex, India ramp and working capital needs.

Negative Factors

Deteriorated profitability and returns

Margins and returns have reversed from prior profitable years, reflecting structural earnings pressure. Negative net margin and ROE erode retained capital, restrict reinvestment, and make the business more sensitive to volume swings; sustained margin recovery is required to restore long‑term capital efficiency.

Weak free cash flow and rising inventories

Negative FCF and a sizable inventory build lengthen the cash conversion cycle and tie up liquidity needed for R&D and capacity expansion. Persistent FCF weakness increases funding and covenant risk, raising reliance on external financing despite recent refinancing improvements.

Episodic industrial tendering and regional softness

Industrial tender-driven sales are lumpy and can cause multi‑quarter revenue volatility, complicating capacity planning and working capital. Concurrent APAC weakness and flat China demand limit geographic diversification, slowing predictable conversion of pipeline to steady revenue.

Varex Imaging Business Overview & Revenue Model

Company Description

Varex Imaging Corporation designs and manufactures X-ray imaging components. The company operates in two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, 3D reconstruction and computer-aided diagnostic software, collimators, automatic exposure control devices, generators, heat exchangers, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy, oncology, CT, cardiac, surgery, dental, computer-aided detection, and other diagnostic radiography uses. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital detectors, and high voltage connectors for use in security and industrial inspection applications, such as airport security, cargo screening at ports and borders, and nondestructive testing and examination in various applications. Varex Imaging Corporation sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. The company has operations in North America, South America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation was founded in 2016 and is based in Salt Lake City, Utah.

How the Company Makes Money

Varex makes money primarily by selling imaging components and related products to OEM customers that build complete imaging systems. Key revenue streams include: (1) X-ray tubes: the company sells X-ray sources used in medical imaging systems (including radiography and CT) and in industrial inspection equipment; these products generate revenue through initial equipment builds and ongoing replacement demand because tubes are consumable/high-wear components with finite lifetimes. (2) Digital detectors: Varex sells flat-panel and other digital X-ray detectors that convert X-rays into digital images; revenue is driven by OEM production volumes, technology upgrades (e.g., higher performance detectors), and mix across medical and industrial applications. (3) High-voltage and imaging subsystem components: the company supplies high-voltage connectors, cables, and related assemblies used to power and connect imaging chains; these sales tend to track OEM system shipments and service needs. (4) Service/aftermarket and spares: where applicable, the company generates recurring revenue from replacement parts and support for installed imaging equipment, particularly tied to components such as tubes and detector-related spares. Revenue is influenced by long-term OEM relationships and design wins, because components are often engineered into a customer’s platform and then purchased over the life of that platform. The company’s earnings are therefore sensitive to end-market demand for medical imaging equipment and industrial inspection systems, OEM production cycles, and the mix between new equipment builds and replacement/aftermarket demand.

Varex Imaging Financial Statement Overview

Summary

Despite very strong TTM revenue growth (+116%), profitability has deteriorated (negative EBIT and deeply negative net margin) and cash quality is mixed with TTM free cash flow turning negative, increasing execution and funding risk. Balance sheet leverage appears moderate, but negative ROE and weakening returns temper the overall picture.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly (+116%), but profitability has deteriorated: gross margin is steady around ~34% while operating profit is negative (EBIT margin ~-2.8%) and net margin is deeply negative (~-8.3%) with a sizable net loss. The last two annual periods show continued losses, a sharp reversal from 2022–2023 when the company was solidly profitable, highlighting weaker earnings quality and higher volatility in the current cycle.

Balance Sheet

Leverage looks moderate relative to equity (debt-to-equity generally ~0.82–0.95 historically), which is supportive, but returns have weakened materially: TTM (Trailing-Twelve-Months) return on equity is negative (about -14%), following negative ROE in the last two annual reports. Total assets have drifted lower versus earlier years, and the shift from positive to negative profitability increases balance-sheet risk despite reasonable headline leverage.

Cash Flow

Cash generation has become less reliable. TTM (Trailing-Twelve-Months) operating cash flow is positive ($16.1M) but free cash flow is negative (-$13.3M), a notable step down from positive free cash flow in the prior two annual periods (2023–2025). Cash flow relative to earnings is not providing strong support (operating cash flow is a small fraction of the net loss), and the sharp negative free-cash-flow growth in TTM signals higher near-term funding/discipline risk.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	854.40M	844.60M	811.00M	893.40M	859.40M	818.10M
Gross Profit	291.80M	290.50M	256.90M	290.30M	283.50M	271.50M
EBITDA	7.60M	3.50M	62.90M	94.70M	114.50M	104.50M
Net Income	-67.70M	-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	125.60M	155.10M	200.50M	193.90M	89.40M	144.60M
Total Debt	401.30M	401.90M	470.40M	469.80M	436.40M	459.40M
Total Liabilities	607.20M	620.80M	667.80M	668.60M	637.70M	651.00M
Stockholders Equity	476.90M	472.60M	535.10M	567.70M	533.40M	483.30M
Cash Flow
Free Cash Flow	-13.30M	18.80M	20.40M	87.70M	-4.40M	77.50M
Operating Cash Flow	16.10M	41.70M	47.30M	108.40M	16.90M	92.60M
Investing Cash Flow	5.60M	10.30M	-27.50M	-44.90M	-48.40M	-16.20M
Financing Cash Flow	-202.40M	-75.90M	-3.30M	-200.00K	-23.80M	-32.30M

Varex Imaging Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VREX, the sentiment is Negative. The current price of 13.59 is above the 20-day moving average (MA) of 12.06, above the 50-day MA of 13.10, and above the 200-day MA of 11.19, indicating a bearish trend. The MACD of -0.67 indicates Positive momentum. The RSI at 26.41 is Positive, neither overbought nor oversold. The STOCH value of 29.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VREX.

Varex Imaging Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BVS	65 Neutral	$718.46M	21.81	4.97%	―	1.58%	―
DCTH	61 Neutral	$315.15M	134.00	2.63%	―	251.54%	―
SIBN	56 Neutral	$564.87M	-45.38	-12.91%	―	23.27%	43.90%
BFLY	55 Neutral	$1.01B	-12.19	-35.34%	―	16.04%	28.91%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
NNOX	47 Neutral	$153.67M	-4.35	-32.46%	―	15.19%	-3.32%
VREX	46 Neutral	$446.65M	52.93	-13.86%	―	4.14%	-45.29%

Varex Imaging Corporate Events

Varex Imaging Refinances Debt With New Credit Facility

On March 13, 2026, Varex Imaging Corporation and certain subsidiaries entered a new $490 million secured credit facility maturing in 2031, comprising a $350 million term loan, a $100 million revolving credit line and a $40 million delayed draw term loan. Borrowings are priced off SOFR plus a leverage-based margin, and Varex has hedged the SOFR component to a fixed 3.65%, while standard covenants, guarantees and default provisions govern the facility.

On March 13, 2026, Varex drew $350 million from the term loan and, together with about $42 million of cash, funded the redemption of its $368 million 7.875% Senior Secured Notes due 2027, with the notes redeemed on March 16, 2026. Concurrently, the company discharged the 2027 notes indenture, terminated its prior $155 million revolving credit facility and reduced net debt by roughly $18 million, moves that are expected to lower annual cash interest expense by more than $7 million and improve financial flexibility for ongoing investment and shareholder returns.

The most recent analyst rating on (VREX) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Varex Imaging stock, see the VREX Stock Forecast page.

Varex Imaging Shareholders Back Board, Pay and Auditor

At Varex Imaging’s annual meeting held on February 12, 2026, shareholders representing about 92% of eligible common stock were present in person or by proxy, establishing a quorum for all items of business. Investors elected seven directors, including Kathleen L. Bardwell and Sunny S. Sanyal, to serve until the 2027 annual meeting, reinforcing continuity in the company’s board leadership and governance structure.

Shareholders also approved on an advisory basis the compensation of the company’s named executive officers, signaling broad support for Varex Imaging’s current pay practices and leadership incentives. In addition, investors ratified Deloitte & Touche LLP as the independent registered public accounting firm for fiscal 2026, maintaining the existing audit relationship and underpinning financial reporting stability for the coming year.

The most recent analyst rating on (VREX) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Varex Imaging stock, see the VREX Stock Forecast page.