# Varex Imaging (VREX.US)

Canonical: https://gigainvestors.com/s/VREX

Analysis as of: 2026-10-16T07:32:55.512Z. Financial observations: FY2013–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $18.47 per share; close as of 2026-10-15.

Estimated value: low $12.71 per share, central $14.19 per share, high $16.17 per share. Buy at or below the central value $14.19 per share. Valuation as of 2026-10-16T07:32:55.512Z; scenarios are not confidence intervals.

Expected annual return: 8.1% at the stated quote. About 8.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 3

- Operating margin variation: 1.09×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.18×

- FY2017: 0.12×

- FY2018: 0.06×

- FY2019: 0.01×

- FY2020: -0.05×

- FY2021: 0.09×

- FY2022: 0.10×

- FY2023: 0.09×

- FY2024: 0.04×

- FY2025: -0.03×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 9.0%

- ROIC, second-lowest year: -4.2%

- Typical minus recent gross margin: 0.4 pp

- Typical gross margin (annual median): 32.9%

- Recent gross margin (lower of latest and 3-year median): 32.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.7%

- ROIC including acquisitions, ten-year median: 4.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 17.3%

- FY2017: 10.8%

- FY2018: 8.5%

- FY2019: 1.2%

- FY2020: -4.9%

- FY2021: 9.5%

- FY2022: 10.2%

- FY2023: 13.9%

- FY2024: 4.1%

- FY2025: -4.2%

### economics: fail

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $33M

- Net income, five-year total: -$23M

- Return on incremental invested capital: -278.8%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: -0.8 pp

- Working capital / revenue, final three-year average: 44.3%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: $40M

- FY2022: $43M

- FY2023: $60M

- FY2024: -$44M

- FY2025: -$66M

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2025 (8 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 10.8% vs 4.1%

- Per-share earnings: 1.82 to -1.17 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.9%

- Ordinary dilution, 5-year annual growth: 1.3%

- Market cap gain: -$757M

- Cumulative retained earnings: -$41M

- Diluted shares, 10-year annual growth: 0.9%

- Diluted shares, 5-year annual growth: 1.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2025

- Per-share value change: -$2.99

- Per-share value, starting three-year median: $1.82

- Per-share value, ending three-year median: -$1.17

- Buybacks concentrated in cheaper years (correlation): -0.57

- Average buyback yield: 0.3%

- Buyback history: 8 years

- Debt-funded buybacks: Yes

- Acquisition spending: $350M

- Cumulative net income, 10 years: $82M

- ROIC, first three-year median: 10.8%

- ROIC, last three-year median: 4.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.82

- FY2017: $1.36

- FY2018: $0.72

- FY2019: $0.40

- FY2020: -$1.49

- FY2021: $0.43

- FY2022: $0.73

- FY2023: $0.94

- FY2024: -$1.17

- FY2025: -$1.70

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -10.1%

- Receivables to sales index (DSRI): 0.96×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 36.0%

- Earnings backed by cash: Yes

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.45×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -0.9%

- FY2017: -2.2%

- FY2018: -5.8%

- FY2019: -5.4%

- FY2020: -6.2%

- FY2021: -6.6%

- FY2022: 1.1%

- FY2023: -4.9%

- FY2024: -7.8%

- FY2025: -10.1%

## Holders

- [Richard Pzena](https://gigainvestors.com/PIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 41% since Dec 2021 · "Varex Imaging Shares Fall 13% Despite Q4 Revenue Growth; FY26 Outlook Soft" (nasdaq.com, Nov 2025) · sales +4.1%

Story as of 2026-10-16T09:59:49.077Z; price observation 2026-10-15.

Price needs cash profits to grow 4.6% a year for ten years

- 2025-11-19: Varex Imaging Shares Fall 13% Despite Q4 Revenue Growth; FY26 Outlook Soft ([nasdaq.com](https://www.nasdaq.com/articles/varex-imaging-shares-fall-13-despite-q4-revenue-growth-fy26-outlook-soft))

- 2026-08-10: Varex Q3 FY2026 Results Show Revenue Growth and Margin Expansion Ahead of Teledyne Transaction ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/varex-q3-fy2026-results-show-150051610.html))

### Sales · FY2024–2025

sales +4.1%; source https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm; observed 2025-11-18.

- FY2016: $620M 

- FY2017: $698M 

- FY2018: $773M 

- FY2019: $781M 

- FY2020: $738M 

- FY2021: $818M 

- FY2022: $859M 

- FY2023: $893M 

- FY2024: $811M 

- FY2025: $845M 

### Gross margin · FY2025

gross margin 34.4%; source https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm; observed 2025-11-18.

- FY2016: 40.1% 

- FY2017: 36.3% 

- FY2018: 32.8% 

- FY2019: 32.9% 

- FY2020: 25.8% 

- FY2021: 33.2% 

- FY2022: 33.0% 

- FY2023: 32.5% 

- FY2024: 31.7% 

- FY2025: 34.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in medical devices; annual sales are USD 844.6 million.

- Source: https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm (filed 2025-11-18); FY2025: revenue 844600000; grossProfit 290500000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); VREX.US: Varex Imaging Corporation designs, manufactures, and sells X-ray imaging components. It operates through two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components, comprising X-ray tubes, digital detectors and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. This segment's products are used in a range of applications, including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. The Industrial segment designs, develops, manufactures, sells, and services Linatron X-ray linear accelerators, non-intrusive cargo inspection systems, X-ray tubes, digital detectors, high voltage connectors, and coolers for use in security and inspection applications, such as baggage screening at airports, cargo screening at ports and borders, and nondestructive testing, irradiation, and inspection in various applications. It sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. The company has operations in North America, Latin America, Europe, the Middle East, India, Africa, Asia, and Australia. The company was incorporated in 2016 and is headquartered in Salt Lake City, Utah.

### Why customers stay

Margins ranged from 31.7% to 34.4% during 2023–25; it earns 9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2023: grossProfit / revenue = 32.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2024: grossProfit / revenue = 31.7%.

- Source: https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm (filed 2025-11-18); FY2025: grossProfit / revenue = 34.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); 10-year return on capital observations [[2016,0.17275731497418245],[2017,0.1082149261212592],[2018,0.08549471661863593],[2019,0.011579643565772305],[2020,-0.04907465437788019],[2021,0.0952065625617711],[2022,0.10244385322173429],[2023,0.13889389299225366],[2024,0.04059338521400778],[2025,-0.04215355086372361]]; median 0.09035063959020351. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 33% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm (filed 2025-11-18); Gross margin observations: [[2021,0.33186651998533184],[2022,0.3298813125436351],[2023,0.3249384374300425]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 7 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2016: growth capex 0; upkeep 28900000; cash acquisitions 1200000; owner earnings 54900000. Growth capex plus acquisitions / owner earnings = 0.02185792349726776.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2017: growth capex 0; upkeep 20200000; cash acquisitions 271800000; owner earnings 58800000. Growth capex plus acquisitions / owner earnings = 4.622448979591836.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2018: growth capex 0; upkeep 20400000; cash acquisitions 4800000; owner earnings 49300000. Growth capex plus acquisitions / owner earnings = 0.0973630831643002.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2019: growth capex 0; upkeep 19800000; cash acquisitions 69500000; owner earnings 34900000. Growth capex plus acquisitions / owner earnings = 1.991404011461318.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2021: growth capex 0; upkeep 15100000; cash acquisitions 0; owner earnings 39600000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2022: growth capex 0; upkeep 21300000; cash acquisitions 0; owner earnings 42600000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); FY2023: growth capex 0; upkeep 20700000; cash acquisitions 1000000; owner earnings 59900000. Growth capex plus acquisitions / owner earnings = 0.01669449081803005.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); Dividend observations: [[2016,227100000],[2017,227100000],[2018,600000],[2019,500000],[2020,53100000],[2021,1300000],[2022,2800000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 1.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); VREX.US SharesStats.PercentInsiders = 1.714 percentage points; cache date 2026-10-15.

### What the price says

The price assumes cash profits grow 4.6% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-18); Ten-year compound average after fade. Initial solved rate 0.05353753592592836. Price 18.47; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.5384615384615385 → FY2025 -1.5942028985507246. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2017-01: $28.75 per share

- 2017-02: $34.82 per share

- 2017-03: $33.60 per share

- 2017-04: $33.56 per share

- 2017-05: $34.35 per share

- 2017-06: $33.80 per share

- 2017-07: $30.85 per share

- 2017-08: $30.53 per share

- 2017-09: $33.84 per share

- 2017-10: $34.37 per share

- 2017-11: $37.07 per share

- 2017-12: $40.17 per share

- 2018-01: $42.47 per share

- 2018-02: $34.89 per share

- 2018-03: $35.78 per share

- 2018-04: $35.99 per share

- 2018-05: $36.96 per share

- 2018-06: $37.09 per share

- 2018-07: $38.24 per share

- 2018-08: $31.40 per share

- 2018-09: $28.66 per share

- 2018-10: $25.96 per share

- 2018-11: $26.35 per share

- 2018-12: $23.68 per share

- 2019-01: $28.49 per share

- 2019-02: $31.44 per share

- 2019-03: $33.88 per share

- 2019-04: $32.84 per share

- 2019-05: $26.68 per share

- 2019-06: $30.65 per share

- 2019-07: $31.79 per share

- 2019-08: $26.35 per share

- 2019-09: $28.54 per share

- 2019-10: $30.01 per share

- 2019-11: $29.94 per share

- 2019-12: $29.81 per share

- 2020-01: $27.65 per share

- 2020-02: $23.22 per share

- 2020-03: $22.71 per share

- 2020-04: $26.13 per share

- 2020-05: $18.76 per share

- 2020-06: $15.15 per share

- 2020-07: $15.68 per share

- 2020-08: $11.09 per share

- 2020-09: $12.72 per share

- 2020-10: $13.40 per share

- 2020-11: $16.68 per share

- 2020-12: $16.68 per share

- 2021-01: $19.36 per share

- 2021-02: $22.93 per share

- 2021-03: $20.49 per share

- 2021-04: $23.74 per share

- 2021-05: $25.09 per share

- 2021-06: $26.82 per share

- 2021-07: $27.30 per share

- 2021-08: $29.17 per share

- 2021-09: $28.20 per share

- 2021-10: $26.85 per share

- 2021-11: $28.55 per share

- 2021-12: $31.55 per share

- 2022-01: $26.10 per share

- 2022-02: $23.64 per share

- 2022-03: $21.29 per share

- 2022-04: $19.85 per share

- 2022-05: $23.04 per share

- 2022-06: $21.39 per share

- 2022-07: $22.29 per share

- 2022-08: $21.09 per share

- 2022-09: $21.14 per share

- 2022-10: $22.11 per share

- 2022-11: $21.24 per share

- 2022-12: $20.30 per share

- 2023-01: $21.49 per share

- 2023-02: $17.69 per share

- 2023-03: $18.19 per share

- 2023-04: $17.74 per share

- 2023-05: $22.04 per share

- 2023-06: $23.57 per share

- 2023-07: $23.29 per share

- 2023-08: $19.67 per share

- 2023-09: $18.79 per share

- 2023-10: $18.05 per share

- 2023-11: $18.85 per share

- 2023-12: $20.50 per share

- 2024-01: $19.27 per share

- 2024-02: $17.20 per share

- 2024-03: $18.10 per share

- 2024-04: $16.25 per share

- 2024-05: $15.45 per share

- 2024-06: $14.73 per share

- 2024-07: $14.79 per share

- 2024-08: $12.48 per share

- 2024-09: $11.92 per share

- 2024-10: $13.13 per share

- 2024-11: $16.68 per share

- 2024-12: $14.59 per share

- 2025-01: $13.74 per share

- 2025-02: $12.86 per share

- 2025-03: $11.60 per share

- 2025-04: $8.32 per share

- 2025-05: $7.67 per share

- 2025-06: $8.67 per share

- 2025-07: $7.28 per share

- 2025-08: $11.55 per share

- 2025-09: $12.40 per share

- 2025-10: $11.69 per share

- 2025-11: $11.57 per share

- 2025-12: $11.65 per share

- 2026-01: $13.94 per share

- 2026-02: $13.17 per share

- 2026-03: $10.61 per share

- 2026-04: $11.65 per share

- 2026-05: $10.23 per share

- 2026-06: $10.43 per share

- 2026-07: $11.19 per share

- 2026-08: $18.49 per share

- 2026-09: $18.45 per share

- 2026-10: $18.47 per share

## Annual estimated value (USD per share)

- FY2017: low $20.24 per share, central $22.78 per share, high $26.16 per share

- FY2018: low $20.44 per share, central $23.13 per share, high $26.70 per share

- FY2019: low $18.99 per share, central $21.56 per share, high $24.97 per share

- FY2020: low $15.47 per share, central $17.30 per share, high $19.73 per share

- FY2021: low $13.92 per share, central $15.40 per share, high $17.37 per share

- FY2022: low $12.67 per share, central $14.17 per share, high $16.18 per share

- FY2023: low $12.90 per share, central $14.19 per share, high $15.92 per share

- FY2024: low $15.03 per share, central $16.48 per share, high $18.41 per share

- FY2025: low $14.13 per share, central $15.62 per share, high $17.60 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1681622/000168162225000108/var-20251003.htm); period 2025-10-03, filed 2025-11-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.