Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has reported significant growth in both its Medical and Industrial segments, with the Industrial segment achieving a record revenue of $76.8 million, reflecting a 25.3% year-over-year increase, driven largely by cargo inspection system shipments. The company has also noted positive trends in China, with an expected increase in orders for CT systems as rural healthcare expands, alongside a pause in anti-dumping investigations related to CT tube pricing, which could enhance future profitability. Additionally, Varex's strategic initiatives, including a focus on local manufacturing to reduce supply chain risks and ongoing advancements in photon counting CT technology, position the company favorably for continued revenue growth and improved gross margins moving into FY2026.

Varex Imaging's outlook is negatively influenced by the ongoing trade tensions between the U.S. and China, which are expected to impact approximately 15% of the company's total revenues, particularly due to complications in importing materials and challenging sales conditions in China. The company's cash and equivalents decreased by $58 million year-over-year, indicating potential liquidity concerns amidst a $155 million cash position, which raises questions about financial stability. Additionally, while there may be projections for higher orders and sales by 2026, the current adverse conditions undermine confidence in the company's immediate financial performance and growth prospects.