Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has demonstrated strong financial performance, highlighted by approximately $35 million in sales from China in F1Q25, reflecting a rebound in business and an expectation of improved operating margins due to a higher mix of sales from more profitable X-ray tubes. The company's strategic focus on diversifying material sources and expanding manufacturing capabilities has enhanced its resilience against supply chain disruptions, supporting steady revenue growth across its key segments. Additionally, with cash flow from operations amounting to $9.5 million and a cash position of $345 million, Varex is well-positioned to capitalize on increasing demand for cargo inspection systems and border security solutions globally.

Varex Imaging Corp reported a decline in sequential revenues of 2.9% for F1Q25, indicating potential challenges in maintaining consistent revenue growth despite a year-over-year increase of 5.2%. The company faces uncertainties related to tariffs and has encountered difficulties in the China market, further complicating its ability to import materials and affecting approximately 15% of its total revenues. Guidance for F2Q25 anticipates revenues between $200 million and $215 million, reflecting a modest year-over-year change of -3% to +4%, suggesting continued weakness in key segments such as radiography, oncology, and dental markets.