Value
9.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 6.8 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 10.1x
- ▸PEG: 0.07
- ▸Attractively valued
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 score5.9/10
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. | →Stable |
| 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. | →Stable |
| 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. | →Stable |
| 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↓Deteriorating |
| 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.
→StableReward-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.
→StableQuality 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.
→StableEngine 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↓DeterioratingSentiment 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
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 2.1 |
| Gross margin | 2.7 |
| Op margin | 2.7 |
| Net margin | 0.0 |
| Current ratio | 9.8 |
| FCF quality | 0.0 |
| Moat | 3.9 |
| Piotroski F | 8.9 |
- ▸Cash-burning: FCF -5% of revenue
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 10.0 |
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.8 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.4%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.8 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 64%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.5 |
| quality rank | 3.3 |
| growth rank | 1.5 |
Technical
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 1.5 |
| 52w position | 5.1 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.1 |
| volatility | 1.9 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 7.6 |
| debt equity | 6.3 |
- ▸Elevated put/call: 2.27
- ▸High IV: 80%
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:5.5>=4.5
- ASYMMETRY:3.3>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:6d<=7d
Warning (2)
- MOMENTUM:5.5<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.5>=5.0 recovering
Reward-to-Risk
3.34
Upside
+42.5%
Downside
12.7%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 56
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 6d<=7d outcome against Value at 9.0 and asymmetric R:R of 3.34.
The strongest dimensions are Value at 9.0, Catalyst at 7.5, and Insider at 7.3; the weakest are Technical at 2.7, Quality at 3.3, and Peer rank at 4.3. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 3.34 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.