Latest news with #VarexImagingCorporation
Yahoo
a day ago
- Business
- Yahoo
Calculating The Fair Value Of Varex Imaging Corporation (NASDAQ:VREX)
Using the 2 Stage Free Cash Flow to Equity, Varex Imaging fair value estimate is US$8.11 Varex Imaging's US$7.67 share price indicates it is trading at similar levels as its fair value estimate The US$16.60 analyst price target for VREX is 105% more than our estimate of fair value How far off is Varex Imaging Corporation (NASDAQ:VREX) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the forecast future cash flows of the company and discounting them back to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example! We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$24.9m US$46.8m US$39.5m US$35.5m US$33.3m US$32.1m US$31.6m US$31.6m US$31.8m US$32.3m Growth Rate Estimate Source Analyst x1 Analyst x1 Est @ -15.68% Est @ -10.10% Est @ -6.19% Est @ -3.45% Est @ -1.53% Est @ -0.19% Est @ 0.75% Est @ 1.41% Present Value ($, Millions) Discounted @ 11% US$22.4 US$37.8 US$28.6 US$23.1 US$19.5 US$16.9 US$15.0 US$13.4 US$12.2 US$11.1 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$200m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 11%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$32m× (1 + 2.9%) ÷ (11%– 2.9%) = US$398m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$398m÷ ( 1 + 11%)10= US$137m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$337m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$7.7, the company appears about fair value at a 5.5% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Varex Imaging as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 11%, which is based on a levered beta of 1.925. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Varex Imaging Strength No major strengths identified for VREX. Weakness Interest payments on debt are not well covered. Opportunity Expected to breakeven next year. Has sufficient cash runway for more than 3 years based on current free cash flows. Good value based on P/S ratio and estimated fair value. Threat Debt is not well covered by operating cash flow. Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Varex Imaging, we've compiled three important items you should consider: Risks: Every company has them, and we've spotted 2 warning signs for Varex Imaging (of which 1 is potentially serious!) you should know about. Future Earnings: How does VREX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
2 days ago
- Business
- Yahoo
Varex Imaging Corporation (VREX) Downgraded by S&P as Regulatory Outlook Remains Cloudy
S&P Global Ratings has downgraded its ratings on Varex Imaging Corporation (NASDAQ:VREX) because it believes the stock is surrounded by high levels of unpredictability and weaker credit metrics. Tariff drama has been lingering for quite some time now, and with uncertainty around policy implementation by the U.S. administration, the firm believes Varex's profitability and sales are under serious threat. A technician in a lab coat inspecting an X-ray imaging component. The slashing of the rating from 'B+' to 'BB-' also considers the refinancing risk of the company stemming from near-term maturities. With short-term capital structure, external factors, including capital market conditions and geopolitical risk, push the company into a vulnerable state. This isn't the first time the company has exhibited such performance. The credit assessor now expects a leverage above the downside threshold of 3.5x, with a free operating cash flow (FOCF) to debt below 12% for FY2025, much in line with last year's benchmark. No relief from the medical segment either, as the demand remains subdued. Despite the approval of a $1.4 trillion government stimulus package, the Chinese government is taking initiatives to support local vendors, putting further pressure on Varex Imaging Corporation (NASDAQ:VREX)'s sales. However, due to the company's competitive position and new contracts, S&P has extended a stable rating outlook. While we acknowledge the potential of VREX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than VREX and that has 100x upside potential, check out our report about the READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure. None.
Yahoo
21-05-2025
- Business
- Yahoo
Varex to Present at the Jefferies Global Healthcare Conference
SALT LAKE CITY, May 21, 2025--(BUSINESS WIRE)--Varex Imaging Corporation (Nasdaq: VREX) announced today that management is scheduled to present at the Jefferies Global Healthcare Conference in New York. Management will be presenting on Wednesday, June 4, 2025 at 8:10am ET. The webcast can be accessed here or on Varex's website at About Varex Varex Imaging Corporation is a leading innovator, designer, and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors, and other image processing solutions that are key components of X-ray imaging systems, as well as X-ray imaging systems for industrial applications. With a 70+ year history of successful innovation, Varex's products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company's X-ray sources, digital detectors, connecting devices, and imaging software in their systems to detect, diagnose, protect, and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,300 people located in North America, Europe, and Asia. For more information visit View source version on Contacts For Information Contact: Christopher BelfioreDirector of Investor RelationsVarex Imaging Corporation801.973.1566 | investors@
Business Wire
21-05-2025
- Business
- Business Wire
Varex to Present at the Jefferies Global Healthcare Conference
SALT LAKE CITY--(BUSINESS WIRE)--Varex Imaging Corporation (Nasdaq: VREX) announced today that management is scheduled to present at the Jefferies Global Healthcare Conference in New York. Management will be presenting on Wednesday, June 4, 2025 at 8:10am ET. The webcast can be accessed here or on Varex's website at About Varex Varex Imaging Corporation is a leading innovator, designer, and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors, and other image processing solutions that are key components of X-ray imaging systems, as well as X-ray imaging systems for industrial applications. With a 70+ year history of successful innovation, Varex's products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company's X-ray sources, digital detectors, connecting devices, and imaging software in their systems to detect, diagnose, protect, and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,300 people located in North America, Europe, and Asia. For more information visit
Business Wire
08-05-2025
- Business
- Business Wire
Varex Announces Non-Intrusive Cargo Inspection Systems
SALT LAKE CITY--(BUSINESS WIRE)--Varex Imaging Corporation (Nasdaq: VREX) today announced that it has received orders for its high-energy non-intrusive cargo and vehicle inspection systems valued at approximately $25 million USD from an international customer. The systems will be placed at strategic locations securing sea and land ports. Varex Imaging CEO, Sunny Sanyal, stated, 'As a leader in high energy Linear Accelerator based imaging, we are pleased to see that our technology, and track record for quality and excellence is enabling us to win new business in Cargo Systems. We are glad to partner with our customers and end users to help secure ports and borders globally.' For more information about Varex's non-intrusive cargo inspection systems, please contact your Varex representative or visit our website at About Varex Varex Imaging Corporation is a leading innovator, designer, and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors, and other image processing solutions that are key components of X-ray imaging systems, as well as X-ray imaging systems for industrial applications. With a 70+ year history of successful innovation, Varex's products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company's X-ray sources, digital detectors, connecting devices, and imaging software in their systems to detect, diagnose, protect, and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,300 people located in North America, Europe, and Asia. For more information visit Forward Looking Statements This news release contains 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning interest in and adoption and performance of our products and systems; our technology and reputation enabling us to win business; strengthening our portfolio of offerings; and impact on safety and security of infrastructures; and any statements using the terms 'expect,' 'could,' 'may,' 'designed,' and 'possible' or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management's current expectations. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.
