NasdaqGS:VREX

Stock Analysis Report

Executive Summary

Varex Imaging Corporation designs and manufactures X-ray imaging components.

Rewards

Trading at 21.7% below its fair value

Earnings are forecast to grow 37.77% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (2.1%) are lower than last year (3.6%)



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Varex Imaging's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VREX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.3%

VREX

0.5%

US Medical Equipment

0.3%

US Market


1 Year Return

25.8%

VREX

24.7%

US Medical Equipment

18.5%

US Market

Return vs Industry: VREX matched the US Medical Equipment industry which returned 24.7% over the past year.

Return vs Market: VREX exceeded the US Market which returned 18.5% over the past year.


Shareholder returns

VREXIndustryMarket
7 Day3.3%0.5%0.3%
30 Day-6.7%4.9%1.5%
90 Day2.4%6.1%5.7%
1 Year25.8%25.8%25.7%24.7%21.1%18.5%
3 Yearn/a92.9%87.2%45.9%36.4%
5 Yearn/a125.4%100.9%71.4%52.5%

Price Volatility Vs. Market

How volatile is Varex Imaging's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Varex Imaging undervalued compared to its fair value and its price relative to the market?

21.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VREX ($30.27) is trading below our estimate of fair value ($38.67)

Significantly Below Fair Value: VREX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VREX is poor value based on its PE Ratio (69.7x) compared to the Medical Equipment industry average (46.7x).

PE vs Market: VREX is poor value based on its PE Ratio (69.7x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: VREX is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: VREX is good value based on its PB Ratio (2.6x) compared to the US Medical Equipment industry average (4.2x).


Next Steps

Future Growth

How is Varex Imaging forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

37.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VREX's forecast earnings growth (37.8% per year) is above the savings rate (1.7%).

Earnings vs Market: VREX's earnings (37.8% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VREX's revenue (2.3% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: VREX's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VREX's Return on Equity is forecast to be low in 3 years time (13.6%).


Next Steps

Past Performance

How has Varex Imaging performed over the past 5 years?

-38.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VREX has a large one-off loss of $6.6M impacting its September 27 2019 financial results.

Growing Profit Margin: VREX's current net profit margins (2.1%) are lower than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: VREX's earnings have declined by -38.9% per year over the past 5 years.

Accelerating Growth: VREX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VREX had negative earnings growth (-40%) over the past year, making it difficult to compare to the Medical Equipment industry average (28.3%).


Return on Equity

High ROE: VREX's Return on Equity (3.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Varex Imaging's financial position?


Financial Position Analysis

Short Term Liabilities: VREX's short term assets ($440.3M) exceed its short term liabilities ($175.1M).

Long Term Liabilities: VREX's short term assets ($440.3M) exceed its long term liabilities ($405.9M).


Debt to Equity History and Analysis

Debt Level: VREX's debt to equity ratio (85.9%) is considered high.

Reducing Debt: Insufficient data to determine if VREX's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: VREX's debt is not well covered by operating cash flow (17.1%).

Interest Coverage: VREX's interest payments on its debt are not well covered by EBIT (2.5x coverage).


Balance Sheet

Inventory Level: VREX has a high level of physical assets or inventory.

Debt Coverage by Assets: VREX's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Varex Imaging's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate VREX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VREX's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VREX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VREX's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VREX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Varex Imaging's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Sunny Sanyal (55yo)

2.9yrs

Tenure

US$3,001,432

Compensation

Mr. Sunny S. Sanyal has been the Chief Executive Officer, President and Director of Varex Imaging Corporation since January 28, 2017. Mr. Sanyal served as Senior Vice President and President of Imaging Com ...


CEO Compensation Analysis

Compensation vs Market: Sunny's total compensation ($USD3.00M) is about average for companies of similar size in the US market ($USD2.63M).

Compensation vs Earnings: Sunny's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.9yrs

Average Tenure

56yo

Average Age

Experienced Management: VREX's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

2.9yrs

Average Tenure

63yo

Average Age

Experienced Board: VREX's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Clarence Verhoef (64yo)

    Senior VP & CFO

    • Tenure: 2.9yrs
    • Compensation: US$1.03m
  • Howard Goldman

    Director of Investor & Public Relations

    • Tenure: 0yrs
  • Sunny Sanyal (55yo)

    CEO, President & Director

    • Tenure: 2.9yrs
    • Compensation: US$3.00m
  • Kim Honeysett (47yo)

    Senior VP

    • Tenure: 2.9yrs
    • Compensation: US$758.80k
  • Carl LaCasce (62yo)

    Senior VP & GM of Industrial Imaging

    • Tenure: 1.9yrs
    • Compensation: US$781.52k
  • Mark Jonaitis (56yo)

    Senior VP & GM of X-Ray Sources

    • Tenure: 2.9yrs
  • Chad Holman

    Chief Human Resources Officer & VP

    • Tenure: 0yrs
  • David Frick

    Vice President of Operations

    • Tenure: 0yrs
  • Kevin Yankton (52yo)

    Chief Accounting Officer & Corporate Controller

    • Tenure: 2.9yrs
  • Brian Giambattista (60yo)

    Senior VP & GM of X-Ray Detectors

    • Tenure: 2.6yrs
    • Compensation: US$793.43k

Board Members

  • Christine Tsingos (60yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$256.98k
  • Rudi Naumann-Etienne (72yo)

    Chairman

    • Tenure: 2.9yrs
    • Compensation: US$347.97k
  • Erich Reinhardt (73yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$251.98k
  • Walt Rosebrough (65yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: US$167.72k
  • Sunny Sanyal (55yo)

    CEO, President & Director

    • Tenure: 2.9yrs
    • Compensation: US$3.00m
  • Jay Kunkel (59yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$255.98k
  • Jocelyn Chertoff (63yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$242.58k

Company Information

Varex Imaging Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Varex Imaging Corporation
  • Ticker: VREX
  • Exchange: NasdaqGS
  • Founded:
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Market Cap: US$1.125b
  • Shares outstanding: 38.37m
  • Website: https://www.vareximaging.com

Number of Employees


Location

  • Varex Imaging Corporation
  • 1678 South Pioneer Road
  • Salt Lake City
  • Utah
  • 84104
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VREXNasdaqGS (Nasdaq Global Select)YesCommon ShareUSUSDJan 2017
VI4DB (Deutsche Boerse AG)YesCommon ShareDEEURJan 2017

Biography

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-r ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 00:51
End of Day Share Price2019/12/06 00:00
Earnings2019/09/27
Annual Earnings2019/09/27


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.