Varex Imaging (VREX) Stock Forecast & Price Target

Varex Imaging Corp reported robust financial performance, with its industrial segment achieving its strongest quarter to date, generating $76.8 million, representing a 25.3% year-over-year increase, while the medical segment also saw a positive growth of 5.3% year-over-year, totaling $152.1 million. The company is benefiting from a recovering Chinese market, as anticipated order strength for 2026 reflects increasing tender activity in the CT system market, alongside the indefinite pause on anti-dumping investigations, which supports pricing stability. Varex's strategic expansion into manufacturing in India, along with its diversified supply chain and focus on local production, positions the company well for continued growth and operational resilience in the face of potential supply chain disruptions.

Varex Imaging Corp faces a negative outlook due to several critical factors, including the ongoing challenges related to U.S.-China trade tensions, which could potentially affect approximately 15% of its total revenues coming from the Chinese market. The company's financial position reflects a decline in cash and marketable securities, decreasing by $58 million year-over-year to $155 million, indicating potential liquidity concerns that could hinder growth initiatives. Furthermore, while the trade tensions may not affect the company's long-term total addressable market (TAM), the immediate impact of increased costs and complications in importing materials is likely to strain Varex's operational efficiency and profitability in the near term.