Varex Misses Sector Spotlight But Keeps Its Foot on the Gas

Forward-Looking Analysis

Analyst sentiment for the healthcare sector remains robust, with Zen Ratings highlighting strong growth potential for top stocks like Ironwood Pharmaceuticals (IRWD) and Tactile Systems Technology (TCMD). The sector’s average P/E ratio of 69.27x suggests elevated expectations for future earnings. While Varex Imaging is not explicitly named in the top healthcare picks, the broader sector’s momentum—driven by undervalued companies like Embecta (EMBC) and Nutex Health (NUTX)—indicates favorable conditions for medical equipment firms. Intuitive Surgical (ISRG) and HCA Healthcare (HCA) show mixed valuations, with HCA trading below its DCF fair value by 20% and ISRG above. Analysts project healthcare stocks to rise 40.37% annually, suggesting Varex could benefit from sector-wide optimism if it meets or exceeds Q1 2026 revenue and EPS estimates.

Historical Performance Review

Varex Imaging reported Q4 2025 revenue of $228.90 million, net income of $12.20 million, and EPS of $0.29. Gross profit stood at $77.80 million, reflecting stable margins. The results indicate consistent performance, with revenue and profitability aligning with historical trends. The company’s ability to maintain gross profit despite sector volatility positions it as a resilient player in the medical imaging market.

Additional News

No recent news directly references Varex Imaging in the provided content. The healthcare sector broadly saw mixed performance, with Collplant Biotechnologies dropping 53.42% due to a $2 million registered offering. However, undervalued stocks like Embecta (EMBC) and Nutex Health (NUTX) gained traction for strong valuation metrics. Analysts emphasized healthcare’s long-term growth potential, with 58.28% of stocks rated as strong buys. Varex’s absence from specific mentions suggests its Q1 2026 outlook will hinge on its ability to capitalize on sector-wide tailwinds rather than unique catalysts.

Summary & Outlook

Varex Imaging’s Q4 2025 results demonstrate solid financial health, with $228.90 million in revenue and $12.20 million in net income. The company’s gross profit of $77.80 million underscores operational efficiency. While the healthcare sector’s strong analyst forecasts and valuation premiums (e.g., HCA’s 20% undervaluation) suggest a bullish backdrop, Varex’s Q1 2026 performance will depend on maintaining its revenue trajectory and EPS growth. Risks include sector-wide volatility and competition from undervalued peers. A neutral-to-bullish stance is warranted, contingent on meeting Q1 expectations and leveraging the sector’s growth narrative.