One-glance verdict
Within fair range
$18.86 our estimate vs market $18.49
Wall Street consensus: $18.90 (0.2% higher than our fair-value estimate)
2% below our estimate
Fundamentals snapshot
Varex Imaging Corporation
VREX · NMS · Healthcare · Medical Devices
Current price
$18.49
52-week range
$9.09 - $18.63
Market cap
$779.32M
Balance sheet
Stretched
2.02x Stretched
Net debt $279.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.4% last year.
- Reward Returns 4.6% on equity, ahead of 50% of its peers.
- Risk Stock trades 50.5% above its 5-year average P/E.
- Risk Insider ownership is only 1.6% (peer median: 3.8%).
What this company does
Varex Imaging Corporation
Varex Imaging makes the critical parts inside X-ray machines, like the tubes that create the X-rays and the digital sensors that capture the image. The company sells these components to big manufacturers who build medical equipment for hospitals and security scanners for airports and borders. Because these parts are essential for both healthcare diagnostics and security screening, Varex plays a key role in two important global industries.
How the company got here
Varex Imaging's story begins long before its official founding in 2017. Its roots trace back to a company from the 1930s that eventually became part of Varian Medical Systems, a major name in X-ray technology. [2, 10] As Varian's business in imaging components grew, it decided to create a separate, focused company. In 2017, this components business was 'spun off' (separated into a new, independent company) to become Varex Imaging Corporation. [2, 3] This move allowed Varex to concentrate entirely on being a leading independent supplier of the essential parts that go inside X-ray systems. [2]
What it actually does
Varex makes the critical, high-tech components that allow X-ray machines to see inside things. Think of them not as the company that sells the big CT scanner to a hospital, but as the company that makes the most important parts for the manufacturer of that scanner. [3] Their main products are X-ray tubes (which create the X-rays) and digital detectors (which capture the image), along with the specialized software needed to process the image. [5, 7] These parts are sold to other companies, known as original equipment manufacturers (OEMs), who build and sell the final X-ray systems used in hospitals, airports, and factories around the world. [1, 3]
Medical
This is Varex's largest business segment, making up the majority of its sales. [3] It creates and sells the core components for medical imaging systems used for everything from CT scans and mammograms to dental X-rays and surgical procedures. [1, 7] The customers are the big brand names that manufacture the medical equipment found in hospitals and clinics. [1] Varex acts as a key supplier to these manufacturers, providing the specialized technology they need to build their machines. [1]
Industrial
This part of the company applies similar X-ray technology to non-medical uses, primarily for security and inspection. [7, 9] For example, Varex makes components for baggage scanners at airports and large-scale cargo screening systems at ports and borders. [7, 9] It also provides parts for industrial 'non-destructive testing,' which is a way for manufacturers to inspect products like pipes or engine parts for flaws without having to take them apart. This segment benefits from the technology developed for the larger medical business. [1, 9]
What management is betting on now
The company's main strategy is to be the go-to partner for companies that build imaging systems. They are heavily investing in research and development (the process of creating new and improved products) to stay on the cutting edge of technology, especially with more advanced digital detectors. [1, 3] Management is focused on working closely with customers to design components that fit their specific needs, helping them bring better products to market faster. [1, 10] They also aim to grow by supplying more replacement parts for the vast number of systems already in use globally. [3, 5]
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$19.90M
FY2025 Q1
$5.30M
FY2025 Q2
$9.80M
FY2025 Q3
$1.40M
FY2025 Q4
$2.30M
FY2026 Q1
$-26.80M
FY2026 Q2
$-7.70M
FY2026 Q3
$12.00M
Revenue
$210.50M
Net income
$15.70M
Diluted EPS
0.37
Operating cash flow
$21.00M
Free cash flow
$12.00M
Fetching…
Sources
Revenue
$216.00M
Net income
$-8.10M
Diluted EPS
-0.19
Operating cash flow
$-1.50M
Free cash flow
$-7.70M
Fetching…
Sources
Revenue
$209.60M
Net income
$2.30M
Diluted EPS
0.05
Operating cash flow
$-16.10M
Free cash flow
$-26.80M
Fetching…
Sources
Revenue
$228.90M
Net income
$12.20M
Diluted EPS
0.29
Operating cash flow
$7.90M
Free cash flow
$2.30M
Fetching…
Sources
Revenue
$203.00M
Net income
$-89.10M
Diluted EPS
-2.15
Operating cash flow
$7.70M
Free cash flow
$1.40M
Fetching…
Sources
Revenue
$212.90M
Net income
$6.90M
Diluted EPS
0.17
Operating cash flow
$16.60M
Free cash flow
$9.80M
Fetching…
Sources
Revenue
$199.80M
Net income
$-300.00K
Diluted EPS
-0.01
Operating cash flow
$9.50M
Free cash flow
$5.30M
Fetching…
Sources
Revenue
$205.70M
Net income
$-50.00M
Diluted EPS
-1.22
Operating cash flow
$25.90M
Free cash flow
$19.90M
Fetching…
Sources
Is it cheap or expensive?
Fair value $18.86 vs current price $18.49
Wall Street consensus is the average analyst price target: $18.90 (0.2% higher than our fair-value estimate).
Our most-likely fair value is $18.86 a share — about 2.0% away from today's price of $18.49, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $279.2M. Interest coverage 2.0x.
Net debt
$279.20M
Interest coverage
2.02x
Varex Imaging Corporation's profit covers its interest bill about 2.0 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
VREX
BASELINE
Varex Imaging Corporation
Total debt $379.30M Interest coverage 2.02x This is the baseline the peer rows are being compared against.
Total debt $0.00 Interest coverage 13.01x +544% vs VREX Carries about 6.4x more debt cushion than VREX.
Total debt $74.22M Interest coverage -1.61x -100% vs VREX This peer has almost no interest-payment cushion compared with VREX.
Total debt $20.07M Interest coverage -1.02x -100% vs VREX This peer has almost no interest-payment cushion compared with VREX.
What you should know
The case for and against VREX
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.4% last year.
-
Returns 4.6% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Stock trades 50.5% above its 5-year average P/E.
-
Insider ownership is only 1.6% (peer median: 3.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
34.89x
Forward P/E
17.28x
P/B
1.57x
P/S
0.90x
EV/EBITDA
10.77x
PEG ratio
4.98x
Profitability
How much profit each dollar creates
Gross margin
34.3%
Operating margin
10.8%
Net margin
2.6%
ROE
4.6%
ROA
4.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.74x
Current ratio
3.38x
Quick ratio
1.31x
Total debt
$379.30M
Total cash
$100.10M
Growth
How the business has been compounding
Revenue TTM
$865.00M
Revenue 5Y CAGR
0.8%
EPS TTM
0.53
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$11.30M
Free CF TTM
$18.80M
FCF margin
2.2%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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