Varex Imaging (VREX) AI Stock Analysis

• Market Cap: $539.67M
• Dividend Yield: N/A
• Average Volume (3M): 297.70K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.21
• 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: 0.83
• Enterprise Value/Revenue: 0.53
• Enterprise Value/Gross Profit: 1.54
• Enterprise Value/Ebitda: 59.17
• 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: 52 Neutral
• Price Target: $13.50 ▼(-0.66% Downside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is weighed down primarily by weakened financial performance—losses, negative returns, and negative TTM free cash flow—despite strong revenue growth. Technicals are moderately supportive (price above key longer-term averages), while valuation is constrained by a negative P/E and no dividend support. The latest earnings call was constructive on non-GAAP profitability and guidance, but inventory, cash flow, and refinancing risks temper the outlook.

Positive Factors

Product & Market Position

Varex supplies X-ray tubes, digital detectors and software to diverse OEMs and end markets. Its broad product set and OEM relationships create durable revenue channels, recurring replacement/service demand and design-win stickiness that support long-term market share and scale.

Strong Revenue Momentum

Sustained top-line growth, including Q1 gains and double-digit Industrial growth, improves operating leverage potential and funds R&D. Durable revenue expansion across segments bolsters capacity to invest in next-generation detectors and pursue multi-year OEM engagements.

India Manufacturing Ramp

Local manufacturing reduces unit costs, shortens supply chains and supports competitive pricing for global OEMs. A successful India ramp can sustainably improve margins, secure market access in key regions and lower production risk versus single-site manufacturing.

Negative Factors

Earnings & Margin Weakness

A shift from prior profitability to sustained losses and negative ROE (~-14%) weakens internal capital generation and constrains reinvestment. Continued negative margins make earnings recovery and durable shareholder returns reliant on execution and cost discipline over multiple quarters.

Free Cash Flow & Inventory Build

Rising inventory and a move to negative free cash flow indicate working-capital strain and weaker cash conversion. Persistent inventory overhang can depress returns and create funding needs, elevating refinancing or liquidity risk if sales conversion is delayed.

Elevated Debt & Refinancing Need

Material gross debt with a near-term refinancing window exposes the company to market-rate and execution risk. High interest costs and potential refinancing at less favorable terms could pressure margins and liquidity, constraining strategic investment and operational flexibility.

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 Imaging generates revenue primarily through the sale of its imaging components and systems, which include X-ray tubes and digital detectors. The company operates on a B2B model, supplying its products to original equipment manufacturers (OEMs) and end-users in various sectors. Key revenue streams come from the sale of both new imaging systems and replacement parts, as well as service and maintenance contracts for existing equipment. Varex also benefits from strategic partnerships with major healthcare providers and technology firms, which help expand its market reach and enhance product offerings. Additionally, the company invests in research and development to innovate new products, ensuring it remains competitive and can tap into emerging markets.

Varex Imaging Financial Statement Overview

Summary

Despite very strong TTM revenue growth, profitability has deteriorated to negative EBIT and deeply negative net margin, with a swing from prior-year profitability to sustained losses. The balance sheet leverage is moderate, but negative ROE and a return to negative TTM free cash flow (despite positive operating cash flow) raise near-term funding and execution risk.

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	29.30M	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: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 below the 20-day moving average (MA) of 13.67, above the 50-day MA of 13.27, and above the 200-day MA of 10.93, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 42.34 is Neutral, neither overbought nor oversold. The STOCH value of 31.30 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	64 Neutral	$723.35M	77.83	4.97%	―	1.58%	―
DCTH	61 Neutral	$298.82M	137.16	3.00%	―	251.54%	―
SIBN	56 Neutral	$677.50M	-34.71	-12.91%	―	23.27%	43.90%
BFLY	55 Neutral	$937.05M	-11.86	-42.25%	―	16.04%	28.91%
VREX	52 Neutral	$539.67M	-7.73	-13.95%	―	4.14%	-45.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
NNOX	47 Neutral	$165.14M	-2.93	-34.75%	―	15.19%	-3.32%

Varex Imaging Corporate Events

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.