-+ 0.00%
-+ 0.00%
-+ 0.00%

What Varex Imaging Buyers Were Betting On

Simply Wall St·11/14/2026 02:33:26
Listen to the news

If you only skimmed headlines about Varex Imaging’s regulatory risks, goodwill write down, and pressure on medical imaging demand, a double digit gain might have sounded unlikely. Holding Varex Imaging from the start of the year would have returned 55.4%, including dividends. If you had been weighing that decision back on 1 January 2026, what exactly was on record that could justify taking that risk with real capital?

This theme extends beyond Varex Imaging. See which of 36 healthcare AI stocks may still merit a closer look.

The Two Competing Stories Around Varex Imaging

The shares cost US$11.65 at the start of the period, and anyone looking at Varex Imaging then was really choosing between two sharply different stories about where the business could head next.

On the optimistic side, one narrative argued that a fair value of US$16.6, as an implied destination if its assumptions played out, rested on India manufacturing and photon counting technology opening fresh markets and improving long term margins.

The harsher view pinned fair value at US$10 as an implied outcome if pressures on traditional medical imaging demand, healthcare cost controls, and customer concentration risks kept returns under strain.

NasdaqGS:VREX Trailing 12-Month Earnings & Revenue History as at Nov 2026
NasdaqGS:VREX Trailing 12-Month Earnings & Revenue History as at Nov 2026

What The Results Changed For The Varex Imaging Story

The pending Teledyne acquisition of Varex Imaging for about US$1.1b at US$18.90 per share gave clear support to the optimistic case that the assets could command a higher takeout price than the US$10 cautious view implied. Q3 2026 results also showed revenue at US$210.5m and net income at US$15.7m, which meant net margin moved to 7.5%. Taken together, that cut both ways but leaned toward the bullish narrative.

The key assumption tested here was whether higher margin potential would ever show up in reported numbers. For a different stock, you would track net income and net margin, quarter by quarter, against any thesis that rests on margin repair rather than just headline revenue shifts.

What Varex Imaging’s Run Leaves Open Now

Varex Imaging now trades at US$18.1, and the story has shifted from survival questions to what quality of earnings the buyer is acquiring. The swing from a Q3 2025 loss of US$89.1m to Q3 2026 net income of US$15.7m, with net margin moving from a loss of 43.9% to a 7.5% profit, put hard numbers behind the earlier margin debate.

The share price reaction came faster than fundamental data can fully settle. The key assumption to test is how durable that 7.5% margin level really is through a full cycle.

We value every stock in the world, every day. See what our valuation says Varex Imaging is worth now.

Before The Next Story Makes Headlines

The story behind this run has already been told. The next one could be taking shape somewhere else. Where could you start looking before it becomes the headline?

  • Company 1 - 33% below our estimate - sells coconut-based drinks as shoppers shift from niche trial to habitual purchases.
  • Company 2 - 26% below our estimate - expands digital finance tools that transform untapped credit interest into recurring fee revenue.
  • Company 3 - 36% below our estimate - wins complex electrical projects for large data centers needing extended build timelines.

Three companies from the same screener. Open every one of the 32 undervalued companies on it →