Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has demonstrated a positive trajectory by achieving approximately $35 million in sales in China for F1Q25, indicating a rebound in this key market and enhancing the company's operational outlook through higher-margin products. Additionally, Varex's strategic diversification of material sources and expansion of manufacturing capabilities has contributed to mitigating supply chain risks, positioning the company favorably in a post-pandemic environment. With improved sales mix and productivity gains across both the medical and industrial segments, Varex managed to generate $9.5 million in cash flow from operations, alongside a substantial cash reserve of $345 million, reinforcing its financial stability.

Varex Imaging Corp's financial outlook appears negative due to persistent uncertainty surrounding tariffs, which has resulted in revenues remaining below the prior quarterly run-rate of mid-$40 million in specific channels. The company's fiscal first quarter 2025 revenues of $200 million reflected a 2.9% sequential decline, indicating challenges in sales, particularly in China, where anti-corruption measures have hindered market conditions and complicated material imports. Furthermore, the revenue guidance for fiscal second quarter 2025, projected between $200 million and $215 million, suggests a year-over-year change between -3% to +4%, highlighting ongoing struggles in key segments such as radiography, oncology, and dental.