Varex Imaging (VREX) AI Stock Analysis

• Market Cap: $300.46M
• Dividend Yield: N/A
• Average Volume (3M): 360.31K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.82
• Revenue Growth: -3.31%
• EPS Growth: -199.23%
• Country: US
• Employees: 2,300
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Devices
• EPS (TTM): 0.26
• Shares Outstanding: 41,500,000
• 10 Day Avg. Volume: 257,035
• 30 Day Avg. Volume: 360,315
• PEG Ratio: -0.63
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.39
• Enterprise Value/Market Cap: 2.35
• Enterprise Value/Revenue: 0.21
• Enterprise Value/Gross Profit: 2.53
• Enterprise Value/Ebitda: 2.50
• 1Y Price Target: $12.00
• Price Target Upside: 62.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: $7.50 ▲(1.35%Upside)

The overall stock score of 63 reflects a balanced view of Varex Imaging's situation. The company shows strengths in financial management and revenue growth, as highlighted in the earnings call. However, technical analysis indicates bearish momentum, and valuation challenges persist due to negative earnings. Tariff impacts present further risks, though management is working on mitigation strategies.

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 X-ray imaging components and solutions. The company's key revenue streams include the medical imaging segment, which supplies products to manufacturers of diagnostic imaging systems, and the industrial inspection segment, which provides imaging solutions for non-destructive testing applications. Varex Imaging's earnings are significantly supported by long-term partnerships with major OEMs (Original Equipment Manufacturers) in the healthcare and industrial sectors, as well as through ongoing service and support contracts. The company's global reach and continuous investment in research and development contribute to its ability to innovate and sustain a competitive edge in the market.

Varex Imaging Financial Statement Overview

Summary

Varex Imaging's financial performance exhibits strong cash flow management and stable revenue growth. However, profitability remains a challenge due to persistent net losses and higher leverage, which could pose risks in a rising interest rate environment.

Income Statement

Varex Imaging shows moderate revenue growth in the TTM with a slight increase compared to the previous annual period. However, the company reports a negative net income margin due to losses, impacting profitability. The gross profit margin is stable, indicating effective cost management, though EBIT and EBITDA margins show room for improvement.

Balance Sheet

The company's balance sheet indicates a reasonable debt-to-equity ratio, although leverage is on the higher side, which could pose a risk in a rising interest rate environment. The equity ratio is stable, suggesting a balanced asset structure. Return on equity is negative due to net losses, highlighting profitability challenges.

Cash Flow

Varex Imaging demonstrates strong free cash flow growth in the TTM, reflecting improved cash management. The operating cash flow to net income ratio is robust, indicating good cash generation relative to reported earnings. However, the free cash flow to net income ratio highlights the impact of negative earnings on cash flow efficiency.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	811.00M	893.40M	859.40M	818.10M	738.30M
Gross Profit	256.90M	290.30M	283.50M	271.50M	190.20M
EBITDA	67.20M	110.30M	123.60M	112.40M	-1.70M
Net Income	-47.70M	48.20M	30.30M	17.40M	-56.60M
Balance Sheet
Total Assets	1.22B	1.25B	1.18B	1.15B	1.14B
Cash, Cash Equivalents and Short-Term Investments	200.50M	152.60M	89.40M	144.60M	100.60M
Total Debt	470.40M	469.50M	436.40M	459.40M	484.50M
Total Liabilities	667.80M	668.60M	637.70M	651.00M	673.70M
Stockholders Equity	535.10M	567.70M	533.40M	483.30M	451.70M
Cash Flow
Free Cash Flow	20.40M	87.70M	-4.40M	77.50M	-10.30M
Operating Cash Flow	47.30M	108.40M	16.90M	92.60M	13.20M
Investing Cash Flow	-27.50M	-44.90M	-48.40M	-16.20M	-26.90M
Financing Cash Flow	-3.30M	-200.00K	-23.80M	-32.30M	83.60M

Varex Imaging Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 7.4 is below the 20-day moving average (MA) of 8.18, below the 50-day MA of 8.05, and below the 200-day MA of 11.54, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 36.90 is Neutral, neither overbought nor oversold. The STOCH value of 12.31 is Positive, 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
VMD	77 Outperform	$256.51M	21.76	9.79%	―	19.97%	17.21%
VREX	63 Neutral	$300.46M	―	-7.46%	―	-3.31%	-199.23%
SRDX	52 Neutral	$431.98M	―	-16.96%	―	-14.96%	-245.49%
Sector *	52 Neutral	$7.37B	-0.04	-63.81%	2.59%	16.40%	<0.01%
SENS	51 Neutral	$437.41M	―	-161.19%	―	1.64%	16.02%
TLSI	50 Neutral	$174.69M	―	271.41%	―	85.03%	53.73%
NNOX	43 Neutral	$327.74M	―	-30.11%	―	15.32%	15.73%

Varex Imaging Corporate Events

Varex Imaging Faces Anti-Dumping Investigation in China

Varex Imaging Corporation is aware of an anti-dumping investigation initiated by China’s Ministry of Commerce concerning imports of certain medical CT X-ray tubes from the United States and India. Although the company has not received formal notice, it plans to cooperate if notified and believes it complies with competition laws, highlighting potential impacts on its operations and market positioning.