Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.7 |
| P/S | 9.7 |
| EV/EBITDA | 5.4 |
| Fwd P/E | 7.4 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 16.9x
- ▸PEG: 0.16
VREX · Why this verdict
Why Varex Imaging (VREX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Varex Imaging offers a statistically high-asymmetry setup (4.46 ratio, 47.6% modeled upside) riding a strong earnings beat streak, but a death-cross hard block, a quality score below the engine's floor, and thinly covered analyst sentiment keep the setup speculative.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Varex clears the engine's asymmetry gate at a 4.46 ratio, with an analyst-target upside of 47.6% against a 7% stop-loss downside, and an earnings catalyst 26 days out riding a 3-of-4 beat streak. Reward-to-risk math | Price should move toward the analyst-target take-profit of $15.66 (from $10.61) within 12 months as the beat streak potentially extends. | ↓Deteriorating |
| CounterThe death-cross hard-block gate failure signals a bearish technical structure that has historically preceded further downside regardless of the fundamental asymmetry math. | ||
Quality score of 3.3 sits below the engine's 4.0 floor, driven by a cash-burning FCF profile (-5% of revenue) and no competitive moat, despite a strong Piotroski F-Score of 8/9. Quality breakdown | FCF should turn positive and the quality score should climb back above 4.0 over the next 12 months if the thesis reverses. | ↓Deteriorating |
| CounterA strong Piotroski F-Score of 8/9 suggests underlying balance-sheet and earnings-quality trends are actually improving, which may pull the overall quality score above the floor even without an immediate FCF turnaround. | ||
The engine hard-blocks the setup on a death cross even as it classifies the pattern as RECOVERY with MACD improving and RSI at 43, and the momentum score (4.6) only barely misses the 5.5 threshold. Engine gate (failed) | MACD should keep improving and price should reclaim the 200-day moving average, clearing the death-cross block over the next few months. | ↓Deteriorating |
| CounterDeath crosses are a well-documented bearish structural signal, and a stock trading below its 200-day moving average with flat MA slope may continue underperforming even if short-term momentum ticks up. | ||
Analyst upside is estimated at 70%, but the engine flags light analyst coverage (confidence 5.0), dampening the reliability of this bullish sentiment signal. Sentiment breakdown | Analyst coverage should expand and price targets should hold or rise as more analysts initiate coverage over the next 12 months. | Tripped↑Improving |
| CounterWith only a handful of analysts covering the stock, a single price-target change can swing the 70% upside figure dramatically, making it an unstable basis for a thesis. | ||
Varex has beaten estimates in 3 of the last 4 quarters (0 misses) with an average surprise of +189.3%, and the engine flags a CATALYST edge type riding this streak into the July 30, 2026 report. Avg surprise pct | The company should continue beating estimates at the next report, extending the streak to 4 of 5 quarters. | →Stable |
| CounterA 189% average surprise reflects a very low estimate base (small EPS numbers), which can reverse sharply if analysts raise estimates ahead of the next print. | ||
Varex clears the engine's asymmetry gate at a 4.46 ratio, with an analyst-target upside of 47.6% against a 7% stop-loss downside, and an earnings catalyst 26 days out riding a 3-of-4 beat streak.
↓DeterioratingReward-to-risk math
- Expectation
- Price should move toward the analyst-target take-profit of $15.66 (from $10.61) within 12 months as the beat streak potentially extends.
CounterThe death-cross hard-block gate failure signals a bearish technical structure that has historically preceded further downside regardless of the fundamental asymmetry math.
Quality score of 3.3 sits below the engine's 4.0 floor, driven by a cash-burning FCF profile (-5% of revenue) and no competitive moat, despite a strong Piotroski F-Score of 8/9.
↓DeterioratingQuality breakdown
- Expectation
- FCF should turn positive and the quality score should climb back above 4.0 over the next 12 months if the thesis reverses.
CounterA strong Piotroski F-Score of 8/9 suggests underlying balance-sheet and earnings-quality trends are actually improving, which may pull the overall quality score above the floor even without an immediate FCF turnaround.
The engine hard-blocks the setup on a death cross even as it classifies the pattern as RECOVERY with MACD improving and RSI at 43, and the momentum score (4.6) only barely misses the 5.5 threshold.
↓DeterioratingEngine gate (failed)
- Expectation
- MACD should keep improving and price should reclaim the 200-day moving average, clearing the death-cross block over the next few months.
CounterDeath crosses are a well-documented bearish structural signal, and a stock trading below its 200-day moving average with flat MA slope may continue underperforming even if short-term momentum ticks up.
Analyst upside is estimated at 70%, but the engine flags light analyst coverage (confidence 5.0), dampening the reliability of this bullish sentiment signal.
Tripped↑ImprovingSentiment breakdown
- Expectation
- Analyst coverage should expand and price targets should hold or rise as more analysts initiate coverage over the next 12 months.
CounterWith only a handful of analysts covering the stock, a single price-target change can swing the 70% upside figure dramatically, making it an unstable basis for a thesis.
Varex has beaten estimates in 3 of the last 4 quarters (0 misses) with an average surprise of +189.3%, and the engine flags a CATALYST edge type riding this streak into the July 30, 2026 report.
→StableAvg surprise pct
- Expectation
- The company should continue beating estimates at the next report, extending the streak to 4 of 5 quarters.
CounterA 189% average surprise reflects a very low estimate base (small EPS numbers), which can reverse sharply if analysts raise estimates ahead of the next print.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.5 |
| ROA | 2.8 |
| Gross margin | 2.9 |
| Op margin | 4.3 |
| Net margin | 1.3 |
| Current ratio | 9.6 |
| FCF quality | 0.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -179% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 10.0 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.2 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Overbought (RSI 96)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 5.4 |
Insider
4.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.6 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.1 |
| quality rank | 5.0 |
| growth rank | 1.9 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 0.2 |
| 52w position | 9.8 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 7.5 |
| volatility | 3.1 |
| put call | 4.4 |
| implied vol | 2.6 |
| beta | 7.7 |
| debt equity | 6.5 |
| news risk | 3.0 |
- ▸High IV: 65%
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:90d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.86
Upside
-12.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.9=NEGATIVE outcome against Catalyst at 7.6 and asymmetric R:R of -0.86.
The strongest dimensions are Catalyst at 7.6, Growth at 6.7, and Value at 6.6; the weakest are Technical at 4.0, Quality at 4.0, and Peer rank at 4.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.86 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Asymmetry Earnings Catalyst Setup
Trip ifAsymmetry ratio falls below 1.5 from the current 4.46, or price fails to close above $12 within 12 months.
- P2Quality Below Floor On Cash Burn
Trip ifQuality score rises above 4.0 from the current 3.3, or FCF turns positive as a percent of revenue.
- P3Death Cross Hard Block Despite Recovery Signs
Trip ifPrice closes below the prior swing low, or RSI falls back below 35 without recovering within 8 weeks.
- P4Wide Analyst Upside With Dampened SignalTripped
Trip ifAverage analyst price target falls more than 20% from its current level, cutting modeled upside below 30%.
- P5Perfect Recent Beat Streak Into Catalyst
Trip ifEPS surprise turns negative and misses estimates by more than 10% at the July 30, 2026 report.