NYSE:VAR

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Varian Medical Systems

Executive Summary

Varian Medical Systems, Inc. designs, manufactures, sells, and services medical devices and software products for treating cancer and other medical conditions worldwide.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Varian Medical Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-2.8%

VAR

-0.09%

US Medical Equipment

2.3%

US Market


1 Year Return

-11.8%

VAR

6.9%

US Medical Equipment

6.7%

US Market

Return vs Industry: VAR underperformed the US Medical Equipment industry which returned 6.9% over the past year.

Return vs Market: VAR underperformed the US Market which returned 6.7% over the past year.


Shareholder returns

VARIndustryMarket
7 Day-2.8%-0.09%2.3%
30 Day3.1%5.9%7.4%
90 Day7.9%9.0%17.9%
1 Year-11.8%-11.8%7.8%6.9%9.0%6.7%
3 Year12.0%12.0%53.9%49.8%36.6%27.7%
5 Year52.8%35.6%101.2%85.5%64.2%46.1%

Price Volatility Vs. Market

How volatile is Varian Medical Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Varian Medical Systems undervalued compared to its fair value and its price relative to the market?

3.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VAR ($118.92) is trading below our estimate of fair value ($122.54)

Significantly Below Fair Value: VAR is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VAR is good value based on its PE Ratio (46.7x) compared to the US Medical Equipment industry average (49.1x).

PE vs Market: VAR is poor value based on its PE Ratio (46.7x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: VAR is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: VAR is overvalued based on its PB Ratio (5.8x) compared to the US Medical Equipment industry average (3.8x).


Next Steps

Future Growth

How is Varian Medical Systems forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

30.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VAR's forecast earnings growth (30.3% per year) is above the savings rate (2.2%).

Earnings vs Market: VAR's earnings (30.3% per year) are forecast to grow faster than the US market (22.9% per year).

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

Revenue vs Market: VAR's revenue (10.4% per year) is forecast to grow faster than the US market (9.4% per year).

High Growth Revenue: VAR's revenue (10.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VAR's Return on Equity is forecast to be low in 3 years time (17.6%).


Next Steps

Past Performance

How has Varian Medical Systems performed over the past 5 years?

-9.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VAR has a large one-off loss of $154.1M impacting its April 3 2020 financial results.

Growing Profit Margin: VAR's current net profit margins (7%) are lower than last year (12.4%).


Past Earnings Growth Analysis

Earnings Trend: VAR's earnings have declined by -9% per year over the past 5 years.

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

Earnings vs Industry: VAR had negative earnings growth (-38.7%) over the past year, making it difficult to compare to the Medical Equipment industry average (3.4%).


Return on Equity

High ROE: VAR's Return on Equity (12.4%) is considered low.


Next Steps

Financial Health

How is Varian Medical Systems's financial position?


Financial Position Analysis

Short Term Liabilities: VAR's short term assets ($2.5B) exceed its short term liabilities ($1.9B).

Long Term Liabilities: VAR's short term assets ($2.5B) exceed its long term liabilities ($523.5M).


Debt to Equity History and Analysis

Debt Level: VAR's debt to equity ratio (27.8%) is considered satisfactory.

Reducing Debt: VAR's debt to equity ratio has reduced from 30.5% to 27.8% over the past 5 years.

Debt Coverage: VAR's debt is well covered by operating cash flow (72.8%).

Interest Coverage: VAR's interest payments on its debt are well covered by EBIT (211.3x coverage).


Balance Sheet


Next Steps

Dividend

What is Varian Medical Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

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

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


Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if VAR'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 VAR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.7yrs

Average management tenure


CEO

Dow Wilson (61yo)

7.83yrs

Tenure

US$9,446,296

Compensation

Mr. Dow R. Wilson has been the Chief Executive Officer and President of Varian Medical Systems, Inc. since September 29, 2012. Mr. Wilson has been an Independent Director of Agilent Technologies, Inc. sinc ...


CEO Compensation Analysis

Compensation vs Market: Dow's total compensation ($USD9.45M) is about average for companies of similar size in the US market ($USD11.50M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Dow Wilson
President7.83yrsUS$9.45m0.091% $9.8m
Kolleen Kennedy
Chief Growth Officer & President of Proton Solutionsno dataUS$3.55m0.030% $3.2m
Christopher Toth
President of Varian Oncology Systemsno dataUS$2.22m0.0018% $193.3k
Jesse Bruff
Senior VP of Finance & CFO0.58yrno data0.0010% $109.1k
Kevin O'Reilly
Senior Vice President of Global Operations1.25yrsno datano data
Magnus Momsen
Senior VPno datano data0.00099% $106.9k
Tom Rodden
Senior VP & Chief Information Officer0.67yrno datano data
Anshul Maheshwari
VP of Investor Relations & Treasurerno datano datano data
Michael Hutchinson
Senior VP & Chief Legal Officer0.083yrno datano data
Mark Plungy
Director of Public Relationsno datano datano data

0.7yrs

Average Tenure

51yo

Average Age

Experienced Management: VAR's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Dow Wilson
President7.83yrsUS$9.45m0.091% $9.8m
Judy Bruner
Independent Director3.92yrsUS$281.25k0.0061% $660.9k
Robert Eckert
Independent Chairman6.42yrsUS$372.00k0.014% $1.6m
Phillip Febbo
Independent Director0.92yrUS$25.00k0.00053% $57.2k
Jeffrey Balser
Independent Director1.75yrsUS$321.20k0.0018% $190.1k
Jean-Luc Butel
Independent Director3.33yrsUS$272.62k0.0035% $379.1k
David Illingworth
Independent Director8.92yrsUS$257.00k0.016% $1.7m
Regina Dugan
Independent Director6.58yrsUS$265.75k0.012% $1.3m
Michelle Le Beau
Independent Director0.67yrno datano data
Anat Ashkenazi
Independent Director1.58yrsUS$276.81k0.0015% $160.9k

3.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: VAR's board of directors are considered experienced (3.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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.


Top Shareholders

Company Information

Varian Medical Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Varian Medical Systems, Inc.
  • Ticker: VAR
  • Exchange: NYSE
  • Founded: 1948
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Market Cap: US$10.800b
  • Shares outstanding: 90.81m
  • Website: https://www.varian.com

Number of Employees


Location

  • Varian Medical Systems, Inc.
  • 3100 Hansen Way
  • Palo Alto
  • California
  • 94304
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VARNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
VNMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0LNULSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
VAR *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
V1AR34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Varian Medical Systems, Inc. designs, manufactures, sells, and services medical devices and software products for treating cancer and other medical conditions worldwide. It operates in Oncology Systems and Proton Solutions segments. The Oncology Systems segment offers hardware and software products for treating cancer with radiotherapy, fixed field intensity-modulated radiation therapy, image-guided radiation therapy, volumetric modulated arc therapy, stereotactic radiosurgery, stereotactic body radiotherapy, and brachytherapy, as well as quality assurance equipment. Its products include linear accelerators, brachytherapy after loaders, treatment accessories, and quality assurance software; and information management, treatment planning, image processing, clinical knowledge exchange, patient care management, decision-making support, and practice management software. This segment serves university research and community hospitals, private and governmental institutions, healthcare agencies, physicians’ offices, medical oncology practices, radiotherapy centers, and cancer care clinics. The Proton Solutions segment designs, develops, manufactures, sells, and services products and systems for delivering proton therapy for the treatment of cancer. The company has a strategic agreement with Siemens AG; and partnership agreement with Siemens AG, as well as with The National University Cancer Institute. Varian Medical Systems was formerly known as Varian Associates, Inc. and changed its name to Varian Medical Systems, Inc. in April 1999. The company was founded in 1948 and is headquartered in Palo Alto, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/12 23:53
End of Day Share Price2020/07/10 00:00
Earnings2020/04/03
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.