Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp has shown strong growth in both its Medical and Industrial segments, with the Industrial sector delivering a record revenue of $76.8 million, representing a year-over-year increase of 25.3%, while the Medical segment achieved a growth of 5.3% to $152.1 million. The company is witnessing early signs of stabilization in China, which is expected to contribute to stronger order projections in 2026, particularly in rural healthcare, along with positive developments in anti-dumping investigations regarding CT tube pricing. Additionally, Varex's strategic initiatives in diversifying material sources, expanding manufacturing capabilities, and advancing photon counting CT technology position it favorably for continued revenue growth and enhanced operational efficiency.

Varex Imaging Corp faces a significant negative outlook primarily due to the challenges in the Chinese market, which accounts for approximately 15% of its total revenues, compounded by ongoing trade tensions and anti-corruption measures that have adversely affected sales. Additionally, the company's cash and equivalents have seen a decline year-over-year, dropping by $58 million, despite a slight sequential increase, indicating potential liquidity issues that could hinder operational flexibility. These factors, combined with increased costs and complications associated with importing materials, raise concerns about Varex's ability to sustain growth and profitability in a challenging geopolitical landscape.