Varex Imaging (VREX) AI Stock Analysis

• Market Cap: $355.65M
• Dividend Yield: N/A
• Average Volume (3M): 441.06K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.81
• Revenue Growth: -3.31%
• EPS Growth: -199.23%
• Country: US
• Employees: 2,300
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Devices
• EPS (TTM): 0.26
• Shares Outstanding: 41,500,000
• 10 Day Avg. Volume: 518,454
• 30 Day Avg. Volume: 441,062
• PEG Ratio: 0.38
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -191.22
• Enterprise Value/Market Cap: 3.34
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 4.26
• Enterprise Value/Ebitda: 4.21
• 1Y Price Target: $12.00
• Price Target Upside: 37.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: $9.00 ▲(3.21%Upside)

Varex Imaging's overall score is driven by strong cash flow management and recent revenue growth. However, profitability challenges, high leverage, and geopolitical risks in China significantly weigh on the score. Technical indicators and valuation metrics provide mixed signals, further moderating the score.

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 exhibits stable revenue growth and strong cash flow management. However, persistent net losses and high leverage present challenges. The balance sheet is stable, but profitability improvements are needed to mitigate risks associated with higher leverage.

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	TTM	Sep 2024	Sep 2023	Sep 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	827.50M	811.00M	893.40M	859.40M	818.10M	738.30M
Gross Profit	279.20M	256.90M	290.30M	283.50M	271.50M	190.20M
EBITDA	73.10M	67.20M	110.30M	123.60M	112.40M	-1.70M
Net Income	-42.00M	-47.70M	48.20M	30.30M	17.40M	-56.60M
Balance Sheet
Total Assets	1.36B	1.22B	1.25B	1.18B	1.15B	1.14B
Cash, Cash Equivalents and Short-Term Investments	223.00M	200.50M	152.60M	89.40M	144.60M	100.60M
Total Debt	590.70M	470.40M	469.50M	436.40M	459.40M	484.50M
Total Liabilities	793.70M	667.80M	668.60M	637.70M	651.00M	673.70M
Stockholders Equity	549.70M	535.10M	567.70M	533.40M	483.30M	451.70M
Cash Flow
Free Cash Flow	37.70M	20.40M	87.70M	-4.40M	77.50M	-10.30M
Operating Cash Flow	59.30M	47.30M	108.40M	16.90M	92.60M	13.20M
Investing Cash Flow	5.40M	-27.50M	-44.90M	-48.40M	-16.20M	-26.90M
Financing Cash Flow	124.00M	-3.30M	-200.00K	-23.80M	-32.30M	83.60M

Varex Imaging Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.72
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 8.72 is above the 20-day moving average (MA) of 8.32, above the 50-day MA of 8.10, and below the 200-day MA of 11.74, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 59.21 is Neutral, neither overbought nor oversold. The STOCH value of 80.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VREX.

Varex Imaging Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	80 Outperform	$276.67M	23.73	9.79%	―	19.97%	17.21%
VREX	66 Neutral	$355.65M	―	-7.46%	―	-3.31%	-199.23%
Sector *	51 Neutral	$7.55B	0.30	-61.90%	2.27%	17.11%	1.58%
TLSI	50 Neutral	$195.58M	―	271.41%	―	85.03%	53.73%
SRDX	49 Neutral	$418.68M	―	-16.96%	―	-14.96%	-245.49%
SENS	48 Neutral	$358.74M	―	-161.19%	―	1.64%	16.02%
NNOX	48 Neutral	$326.14M	―	-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.