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Varex Imaging Corporation (VREX)
:VREX
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Varex Imaging
(NASDAQ:VREX)54Neutral
Varex Imaging (VREX) vs. S&P 500 (SPY)
Market Cap
$527.77M
Dividend YieldN/A
Average Volume (3M)531.93K
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth-6.49%
EPS Growth-205.13%
CountryUS
Employees2,300
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-1.16
Shares Outstanding41,200,000
10 Day Avg. Volume365,225
30 Day Avg. Volume531,928
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.64
Price to Cash Flow (P/CF)13.90
P/FCF Ratio24.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.00Price Target Upside56.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Varex Imaging Business Overview & Revenue Model
Company DescriptionVarex Imaging Corporation (VREX) is a leading innovator in the imaging components sector, specializing in the design and manufacturing of X-ray imaging components. The company's core products include digital detectors, X-ray tubes, and other image processing solutions that serve a wide range of applications, including medical diagnostics, industrial inspection, and security screening. Varex Imaging operates globally, providing critical components to original equipment manufacturers (OEMs) and end users in the healthcare and industrial sectors.
How the Company Makes MoneyVarex Imaging generates revenue primarily through the sale of its imaging components to OEMs and direct customers in various industries. Its key revenue streams include the sale of digital detectors and X-ray tubes, which are integral to medical imaging systems such as CT scanners, mammography units, and fluoroscopy systems. Additionally, the company serves the industrial sector by providing components for non-destructive testing and inspection applications. Varex Imaging's earnings are further bolstered by service contracts, repair and maintenance services, and strategic partnerships with leading OEMs and technology providers, which enhance its market reach and product offerings.
Varex Imaging Financial Statement Overview
Summary
Varex Imaging faces challenges with declining revenues and persistent net losses, reflected in a low income statement score. The balance sheet shows improved leverage and liquidity, but cash flow trends are mixed, indicating both potential and risks.Income Statement
The income statement shows a declining revenue trend from 2023 to TTM (Trailing-Twelve-Months), coupled with consistent negative net income, indicating profitability challenges. The gross profit margin remains moderate, but the net profit margin is negative due to recurring losses. EBIT and EBITDA margins are also low, reflecting operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals a relatively stable equity base and a decreasing debt-to-equity ratio over time, indicating improved leverage management. However, the equity ratio is moderate, suggesting a balanced but not overly strong financial position. Improving cash reserves and reduced net debt are positive signs.60
Neutral
Cash Flow
Cash flow analysis shows a fluctuating free cash flow, with recent growth in free cash flow being a positive indicator. The operating cash flow to net income ratio is favorable, reflecting effective cash generation relative to income. However, cash flow volatility poses a risk to sustained financial health.55
Neutral
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 820.80M | 811.00M | 893.40M | 859.40M | 818.10M | 738.30M | Gross Profit |
| 268.30M | 256.90M | 290.30M | 283.50M | 271.50M | 190.20M | EBIT |
| 39.10M | 32.10M | 77.10M | 50.70M | 33.40M | -30.90M | EBITDA |
| 66.40M | 67.20M | 110.30M | 123.60M | 112.40M | -1.70M | Net Income Common Stockholders |
| -47.50M | -47.70M | 48.20M | 30.30M | 17.40M | -56.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 188.90M | 200.50M | 152.60M | 89.40M | 144.60M | 100.60M | Total Assets |
| 1.25B | 1.22B | 1.25B | 1.18B | 1.15B | 1.14B | Total Debt |
| 471.40M | 470.40M | 469.50M | 436.40M | 459.40M | 484.50M | Net Debt |
| 329.60M | 301.70M | 316.90M | 347.00M | 314.80M | 383.90M | Total Liabilities |
| 661.50M | 667.80M | 668.60M | 637.70M | 651.00M | 673.70M | Stockholders Equity |
| 576.10M | 535.10M | 567.70M | 533.40M | 483.30M | 451.70M |
| Cash Flow | Free Cash Flow | ||||
| 23.60M | 20.40M | 87.70M | -4.40M | 77.50M | -10.30M | Operating Cash Flow |
| 44.20M | 47.30M | 108.40M | 16.90M | 92.60M | 13.20M | Investing Cash Flow |
| -10.60M | -27.50M | -44.90M | -48.40M | -16.20M | -26.90M | Financing Cash Flow |
| 125.00M | -3.30M | -200.00K | -23.80M | -32.30M | 83.60M |
Varex Imaging Technical Analysis
Negative
12.81
Price Trends
13.65
Negative
13.97
Negative
13.63
Negative
Market Momentum
-0.28
Negative
44.31
Neutral
43.49
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 12.81 is below the 20-day moving average (MA) of 12.99, below the 50-day MA of 13.65, and below the 200-day MA of 13.63, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 44.31 is Neutral, neither overbought nor oversold. The STOCH value of 43.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VREX.
Varex Imaging Risk Analysis
Varex Imaging disclosed 31 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
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $39.59B | 19.94 | 25.60% | 0.14% | 0.61% | 43.28% | |
70 Outperform | $21.50B | 24.36 | 7.24% | 0.89% | 3.84% | -9.29% | |
68 Neutral | $75.88M | 11.31 | 12.70% | ― | 65.60% | ― | |
67 Neutral | $14.48B | 20.42 | 15.78% | ― | 1.75% | 50.25% | |
63 Neutral | $88.91M | 12.46 | 4.68% | ― | -0.83% | -38.41% | |
54 Neutral | $527.77M | ― | -8.57% | ― | -6.49% | -205.13% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
VREX
Varex Imaging
12.81
-4.70
-26.84%
FONR
Fonar
14.09
-8.12
-36.56%
HOLX
Hologic
64.54
-11.79
-15.45%
ZBH
Zimmer Biomet Holdings
107.99
-18.96
-14.94%
SRTS
Sensus Healthcare
4.60
1.20
35.29%
GEHC
GE Healthcare Technologies Inc
86.58
-6.28
-6.76%
Varex Imaging Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -15.72% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with notable revenue growth across segments, improved gross margins, and strong cash management. However, challenges such as unscheduled absences impacting demand fulfillment, increased operating expenses, and uncertainty in the China market present notable concerns. Despite these challenges, the positive aspects, especially in revenue and strategic orders in the industrial segment, suggest a favorable position moving forward.Highlights
Revenue Growth Across Segments
Revenue increased by 5% year over year, with the medical segment growing by 3% and the industrial segment by 10%.
Improved Gross Margin
Non-GAAP gross margin increased to 35%, up from 31% in the same quarter last year, aided by product sales mix and productivity gains.
Strong Cash Management
Cash from operations was $10 million for the quarter, with cash, cash equivalents, and marketable securities totaling $219 million, up $6 million from fiscal 2024 year-end.
China Sales Improvement
Sales in China increased by 7% year over year and 12% sequentially, accounting for 18% of total sales.
Security Inspection Orders
Received additional orders from industrial customers valued at approximately $14 million for cargo inspection systems, contributing to long-term growth opportunities.
Lowlights
Unscheduled Absences Impact
Unscheduled absences during the holidays in US facilities prevented full demand fulfillment, impacting revenue expectations.
Higher Operating Expenses
Operating expenses increased by $4 million compared to the first quarter of fiscal 2024, partially due to a one-time milestone payment and increased expenses in a joint venture.
China Market Uncertainty
Despite improvement, there's no significant clarity on the potential impact of stimulus in China, with sales not yet rebounding to previous highs.
Company Guidance
In the first quarter of fiscal year 2025, Varex Imaging Corporation reported a 5% year-over-year revenue increase, with the medical segment up by 3% and the industrial segment up by 10%. The company's non-GAAP gross margin rose to 35% from 31% in the previous year, benefiting from favorable product sales mix and refunds of German customs duties. Adjusted EBITDA was $24 million, and non-GAAP earnings per share grew to $0.07 from $0.06. Cash generation was strong, with $10 million from operations and a cash balance of $219 million, including $124 million in restricted cash from a senior secured debt offering. The quarter saw significant growth in China sales, up 7% year-over-year, and a notable increase in security inspection product sales within the industrial segment, driven by global demand for security screening. The company also discussed expanded offerings in cargo and security inspection systems, expecting long-term growth in this area. For the second quarter, Varex anticipates revenues between $200 million and $215 million and non-GAAP EPS between $0.05 and $0.20, with a gross margin of 32% to 34%.Varex Imaging Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Varex Imaging Strengthens Financial Position with New Notes
Positive
Dec 23, 2024
Varex Imaging Corporation successfully completed a private offering of $125 million in senior secured notes, which will help in partially repaying its convertible notes due in June 2025, thereby maintaining its revolving credit facility. This financial maneuver strengthens Varex’s position by managing its debt obligations and enhancing operational flexibility, potentially benefiting its stakeholders and supporting its market operations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.