Should You Investigate Varian Medical Systems, Inc. (NYSE:VAR) At US$117?

Today we’re going to take a look at the well-established Varian Medical Systems, Inc. (NYSE:VAR). The company’s stock saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Varian Medical Systems’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Varian Medical Systems

What is Varian Medical Systems worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.96% above my intrinsic value, which means if you buy Varian Medical Systems today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $116.32, there’s only an insignificant downside when the price falls to its real value. In addition to this, Varian Medical Systems has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Varian Medical Systems generate?

NYSE:VAR Past and Future Earnings, September 19th 2019
NYSE:VAR Past and Future Earnings, September 19th 2019

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 78% over the next couple of years, the future seems bright for Varian Medical Systems. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in VAR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on VAR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Varian Medical Systems. You can find everything you need to know about Varian Medical Systems in the latest infographic research report. If you are no longer interested in Varian Medical Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.