Varex Imaging Corporation (VREX)
Valuation Overview•Is Varex Imaging Corporation Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Fragile underlying quality score of 26/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. The company currently retains all capital for reinvestment and growth rather than returning it to shareholders.
VREX struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company is facing top-line contraction (-0.6% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (-3.7%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $216.0M | +4.1% | -0.6% | +2.7% | +2.9% | |
| EBITDA | $21.2M | — | — | — | — | |
| Net Income | -$8.1M | -47.4% | — | — | — | |
| EPS (Diluted) | $-0.19 | -45.3% | — | — | — | |
| Free Cash Flow | -$7.7M | -7.8% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 33.6% | 32.9% | 32.9% | 33.3% |
| Operating Margin | -3.7% | 3.1% | 5.7% | 6.0% |
| Net Margin | -9.6% | -3.0% | -0.6% | 1.3% |
| FCF Margin | -3.6% | 4.9% | 4.7% | 5.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.22 | $0.21 | -4.5% | ||
| Q1'26 | $0.14 | $0.19 | +35.7% | ||
| Q4'25 | $0.18 | $0.37 | +105.6% | ||
| Q3'25 | $0.04 | $0.18 | +350.0% | ||
| Q2'25 | $0.14 | $0.26 | +85.7% | ||
| Q1'25 | $0.04 | $0.07 | +75.0% | ||
| Q4'24 | $0.09 | $0.19 | +111.1% | ||
| Q3'24 | $0.19 | $0.14 | -26.3% |
Total return is +30.4% (1Y), outperforming the benchmark by +9.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -11.0% | -18.3% | — |
| 1Y | +30.4% | +9.6% | — |
| 3YCAGR | -22.9% | -42.0% | — |
| 5YCAGR | -17.4% | -28.7% | — |
| 10YCAGR | -9.5% | -23.1% | — |
The S&P 500 is at 30.6x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Varex Imaging Corporation (VREX) valuation, health, and returns.
Based on peer relative multiples, Varex Imaging Corporation appears Cheap versus peers compared to industry peers.
Varex Imaging Corporation has multiple valuation anchors: Peer Relative Fair Value: $12.40 | Wall Street Analyst Target: $14.50 (implying +40.9% upside). A convergence of these signals offers higher conviction.
Varex Imaging Corporation displays weak financial health with a composite quality score of 26/100, supported by a Altman Z-Score of 1.1 (distress zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of -2.6%.
Varex Imaging Corporation does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Varex Imaging Corporation's current growth trajectory is Accelerating. The company achieved +4.1% 1Y revenue growth and -45.3% 1Y EPS growth, compared to its 3Y revenue CAGR of -0.6%.
Wall Street consensus is Buy based on 6 analysts, beating EPS expectations in 67% of recent quarters with a -1-quarter streak. The consensus price target represents a +40.9% change from current levels.
Investment risks for Varex Imaging Corporation include: -35.1% 1-year max drawdown, high beta (1.47x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.47x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.