Core Insights - The RAM Smid Composite reported a 10.70% increase in Q3 2025, outperforming the Russell 2500 Value Total Return Index which gained 8.17% [1] - Year-to-date, the composite returned 9.29%, matching the benchmark's performance [1] - Smaller market cap indices in the Russell family outperformed larger counterparts in Q3 2025 [1] Company Analysis: Varex Imaging Corporation (NASDAQ:VREX) - Varex Imaging Corporation was the top performer in the RAM Smid Composite for Q3 2025, achieving a return of 43.02% [3] - The stock price recovery followed a sell-off, as investors reassessed the impact of tariffs, which were not as severe as initially feared [3] - Varex's business in China has shown improvement, and the company has flexibility in production to mitigate tariff impacts [3] - Despite a one-month return of -3.27% and a 52-week loss of 1.06%, Varex's revenue for Q3 2025 was $203 million, exceeding guidance [2][4] - Varex is not among the 30 most popular stocks among hedge funds, with 22 hedge fund portfolios holding the stock at the end of Q2 2025, down from 25 in the previous quarter [4] - The company is considered undervalued, with potential in the healthcare CT market recovery and growing security screening offerings [3]

Varex Imaging Conference Summary Company Overview - Varex Imaging is a leading provider of X-ray components, with over 50 years in the industry and a focus on innovation and scale. The company operates two business segments: medical (approximately 70% of revenue) and industrial (approximately 30% of revenue) [2][3]. Key Business Segments - **Medical Segment**: Dominated by X-ray tubes and detectors, with a significant focus on digital detectors since the late 1990s. The company plans to enter the CT detector market using photon counting technology acquired from Direct Conversion in 2018 [2][3]. - **Industrial Segment**: Includes components for cargo inspection systems, which have shown steady growth despite some destocking issues. The company has received over $50 million in orders for new cargo systems [16][17]. Tariff Impact and Mitigation Strategies - Tariffs have significantly impacted Varex's business, with an estimated 100 basis points gross margin impact even after mitigation efforts [4][6]. - The company has successfully passed some tariff-related costs to customers and is implementing operational strategies, including establishing bonded warehouses and shifting supply chains to lower tariff regions [5][4]. - Two factories in India are being developed to produce X-ray components, with the first factory expected to begin shipping detectors soon [8][9]. China Market Update - The business in China has stabilized after previous impacts from an anti-corruption campaign and price dumping investigations. The company anticipates growth in the upcoming fiscal year due to government initiatives to upgrade healthcare infrastructure [10][11][12][13]. - The Chinese government's multi-year initiative to improve rural hospital infrastructure is expected to drive demand for mid-end CT systems [11][13]. Inventory Levels and Purchasing Patterns - The destocking trend among customers, particularly in the medical segment, is largely behind Varex, with a return to regular purchasing patterns [15]. Industrial Segment Growth - The industrial segment has continued to grow, driven by demand for security and cargo inspection systems. The company is seeing a push for more imaging due to safety concerns and regulatory pressures [16][17]. Photon Counting Technology - Varex is developing photon counting technology, which allows for significant dosage reduction and faster X-ray imaging. The company is working with two customers to customize products for the CT market [28][29][30]. - The industrial application of photon counting has already generated about $20 million in annual business, with ongoing customer evaluations [30]. Financial Health and Debt Management - Varex has improved its financial health by paying down a $200 million convertible loan and focusing on deleveraging. The company aims to reduce long-term debt from $370 million to around $325 million [41][43]. - The company expects growth in fiscal 2026, driven by new opportunities in cargo systems, the operationalization of the Indian factory, and early revenue from photon counting technology [45][46]. Conclusion - Varex Imaging is positioned for growth in the coming years, with stabilization in key markets, successful mitigation of tariff impacts, and promising developments in new technologies. The company remains cautious about geopolitical uncertainties but is optimistic about its growth trajectory [46].

Core Viewpoint - Varex Imaging Corporation is scheduled to present at the Sidoti Small Cap Virtual Conference on September 17, 2025, at 3:15pm ET [1] Company Overview - Varex Imaging Corporation is a leading innovator, designer, and manufacturer of X-ray imaging components, including X-ray tubes and digital detectors [1]

Group 1 - VAREX IMAGING (VREX) shares have increased by 53.7% in the past four weeks, closing at $11.45, with a mean price target of $16.75 indicating a potential upside of 46.3% [1] - The average price targets range from a low of $10.00 to a high of $23.00, with a standard deviation of $5.38, suggesting variability in analyst estimates [2] - Analysts have shown strong agreement in revising earnings estimates higher, with a 59.5% increase in the Zacks Consensus Estimate for the current year, indicating positive earnings prospects [11][12] Group 2 - VREX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, which supports the stock's potential upside [13] - While price targets can be misleading, the direction implied by the consensus price target appears to be a useful guide for potential price movement [14]

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - VAREX IMAGING (VREX) is recommended as a cutting-edge growth stock based on its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 13.4%, with projected EPS growth of 21.8% this year, surpassing the industry average of 12.5% [5] Group 2: Key Growth Metrics - Earnings growth is crucial for attracting investor attention, with double-digit growth preferred by growth investors [4] - VAREX IMAGING has an asset utilization ratio (sales-to-total-assets ratio) of 0.66, indicating higher efficiency compared to the industry average of 0.58 [7] - The company's sales are expected to grow by 1.5% this year, while the industry average is 0% [7] Group 3: Earnings Estimate Revisions - The current-year earnings estimates for VAREX IMAGING have increased, with the Zacks Consensus Estimate rising by 31% over the past month [9] - The upward trend in earnings estimate revisions supports the stock's potential for near-term price movements [8] Group 4: Investment Positioning - VAREX IMAGING holds a Zacks Rank 2 (Buy) and a Growth Score of B, positioning it well for outperformance in the growth investment space [11]

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies in the market [2] - VAREX IMAGING (VREX) is highlighted as a strong value stock, currently holding a Zacks Rank 2 (Buy) and an A grade for Value [4][6] Company Metrics - VREX has a Forward P/E ratio of 16.98, significantly lower than the industry average of 21.37 [4] - The stock's Forward P/E has fluctuated between a high of 26.48 and a low of 12.16 over the past 52 weeks, with a median of 19.11 [4] - The P/S ratio for VREX is 0.53, compared to the industry average of 1.5, indicating potential undervaluation [5] Investment Outlook - The combination of VREX's favorable metrics and strong earnings outlook positions it as one of the market's strongest value stocks [6]

Core Viewpoint - VAREX IMAGING (VREX) is positioned as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][2]. Earnings Estimate Revisions - Analysts have shown growing optimism regarding VAREX IMAGING's earnings prospects, leading to a rising trend in estimate revisions, which is expected to positively impact the stock price [2]. - The current-quarter earnings estimate is projected at $0.14 per share, reflecting a year-over-year decline of 26.3%. However, the Zacks Consensus Estimate has increased by 75% over the last 30 days, with one estimate rising and no negative revisions [5]. - For the full year, the earnings estimate stands at $0.55 per share, with a year-over-year change of 0.0%. The consensus estimate has increased by 30.95% due to one upward revision and no negative changes [6][7]. Zacks Rank and Performance - VAREX IMAGING has achieved a Zacks Rank of 2 (Buy), indicating favorable estimate revisions that suggest strong potential for outperformance compared to the S&P 500 [8]. - Historically, stocks with a Zacks Rank of 1 (Strong Buy) and 2 (Buy) have significantly outperformed the S&P 500, with Zacks 1 stocks generating an average annual return of +25% since 2008 [3][8]. Recent Stock Performance - VAREX IMAGING shares have increased by 23.2% over the past four weeks, reflecting investor confidence in the company's earnings growth prospects [9].

Group 1 - Varex Imaging (VREX) shares have increased by 23.2% in the past four weeks, closing at $9.77, with a mean price target of $16.75 indicating a potential upside of 71.4% [1] - The average price targets range from a low of $10.00 to a high of $23.00, with a standard deviation of $5.38, suggesting variability in analyst estimates [2] - Analysts are optimistic about VREX's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [4][11] Group 2 - The Zacks Consensus Estimate for VREX's current year earnings has increased by 31% over the past month, with no negative revisions [12] - VREX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting the extent of gains, they can provide guidance on the direction of price movement [14]

Core Insights - VAREX IMAGING reported revenue of $203 million for the quarter ended June 2025, a decrease of 2.9% year-over-year, but exceeded the Zacks Consensus Estimate of $190.2 million by 6.73% [1] - The company's EPS was $0.18, up from $0.14 in the same quarter last year, resulting in a significant EPS surprise of 350% compared to the consensus estimate of $0.04 [1] Revenue Breakdown - Industrial revenue was $60.9 million, surpassing the average estimate of $57.09 million by two analysts, reflecting a year-over-year increase of 0.7% [4] - Medical revenue totaled $142.1 million, which was above the average estimate of $133.17 million, but represented a decline of 4.4% year-over-year [4] Profitability Metrics - Gross profit for the Industrial segment was $20.8 million, exceeding the average estimate of $18.11 million [4] - Gross profit for the Medical segment was $46.7 million, also above the estimated $42.27 million by two analysts [4] Stock Performance - VAREX IMAGING shares have declined by 16.5% over the past month, contrasting with a 1.2% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - VAREX IMAGING reported quarterly earnings of $0.18 per share, significantly exceeding the Zacks Consensus Estimate of $0.04 per share, marking an earnings surprise of +350.00% [1][2] Financial Performance - The company achieved revenues of $203 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.73%, although this represents a decline from year-ago revenues of $209.1 million [2] - Over the last four quarters, VAREX IMAGING has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - VAREX IMAGING shares have declined approximately 51.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The current Zacks Rank for VAREX IMAGING is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $199.03 million, while the estimate for the current fiscal year is $0.42 on revenues of $801.93 million [7] - The trend of estimate revisions for VAREX IMAGING was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Medical - Products industry, to which VAREX IMAGING belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8]