Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has demonstrated significant growth, particularly in its industrial segment, which recorded a historic revenue of $76.8 million, reflecting a year-over-year increase of 25.3%, while the medical segment also exhibited a healthy growth rate of 5.3% year-over-year, totaling $152.1 million. The company's strategic initiatives, including the expansion of manufacturing capabilities in India and the continued development of photon counting CT detector technology, position it well for sustained growth, with management anticipating strengthened orders in 2026 driven by increasing demand in rural healthcare. Additionally, Varex’s localized manufacturing strategy and ability to pass along tariffs to some customers are expected to enhance gross margins, further supporting a positive outlook for the company's financial performance.

The negative outlook on Varex Imaging's stock is primarily driven by the anticipated adverse effects of new tariffs between China and the U.S., which could impact approximately 15% of the company's total revenues. Additionally, the challenging sales environment in China due to government anti-corruption actions and increased costs associated with importing materials have further complicated the company's market position. Despite having $155 million in cash, equivalents, and marketable securities, which highlights some liquidity, the significant year-over-year decline of $58 million raises concerns about the company’s financial stability and ability to navigate current market challenges.