Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has reported strong financial performance, with the industrial segment achieving its best quarter in history at $76.8 million, a 25.3% year-over-year increase, while the medical segment grew 5.3% year-over-year to $152.1 million, indicating a robust demand across both segments. The company's geographical revenue sources show potential for growth, particularly in China, where management projects stronger orders for healthcare equipment in 2026, complemented by ongoing advancements in manufacturing capabilities and the introduction of a local-for-local strategy to enhance supply chain resilience. Additionally, Varex is actively pursuing growth in its photon counting CT technology, with expectations to secure 1-2 additional OEM partners by the end of FY2026, contributing to an overall positive outlook for continued revenue expansion.

Varex Imaging Corporation faces significant challenges that contribute to a negative outlook, particularly due to the ongoing trade tensions between the U.S. and China, which could negatively affect approximately 15% of its total revenues. The company's sales in China are hindered by anti-corruption measures taken by the Chinese government, compounded by increased costs and complications in importing materials. Furthermore, while Varex Imaging holds $155 million in cash and marketable securities, this amount reflects a substantial year-over-year decline of $58 million, highlighting potential liquidity concerns as the company navigates these external pressures.