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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Varex Imaging Corporation (XNAS:VREX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VREX
Name:
VAREX IMAGING CORPORATION (XNAS:VREX)
Sector:
6.70M
Industry:
Medical Devices
CEO:
Mr. Sunny Sanyal
Total Employees:
2,200
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -155.04% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VAREX IMAGING CORPORATION(VREX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND MEDICAL DEVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
21.48
One Month Price Target:
$21.59
Six Month Price Target :
$22.11
Likely Price in One Year's Time:
Ticker:
$22.75
Likely Trading Range Today Under (Normal Volatility)
$21.36
Price Upper limit ($) :
$21.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$20.07
This week:
$18.33
This month :
$15.18
Other Primary facts
Market Cap:
833.11M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
39.90M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.9%
-32.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$28.02
$25.05
$14.94
$17.91
Medium risk (<10%) entry points
Buy Call
Sell Call
$24.08
Buy Put:
Sell Put:
$23.45
$18.87
$19.51
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VREX
Sharpe Ratio:
-0.25%
Comparison:
VREX, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -116.35% lower than the industry
& is -110.87% lower than the market/S&P 500 average
Average Returns/Yield of
VREX
Daily returns:
0.00%
Weekly returns:
0.00%
Monthly returns:
0.02%
Yearly returns:
15.36%
Comparison of returns:
Average annual returns/yield (last 3 years) is -98.54% below industry average
Classification:
VREX, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.53
Statistical test of Returns:
VREX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.20%
Weekly Volatility:
7.15%
Monthly Volatility:
14.29%
Yearly Volatility:
49.50%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.96%
Volatility in last five trading days has been -70.05% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.56%
Weekly VaR:
-14.67%
Monthly VaR:
-29.34%
How Much Can the price of
VREX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$15.91
This translates to price declining to:
$3.22
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
VREX is a 107.11% riskier investment compared to the market/S&P 500 & is 77.43% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.78% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VREX
Beta in relation to market/S&P 500--0.88
Expected beta in 1 year's time:
0.652
Expected beta in 3 year's time:
0.922
Unlevered (debt free) Beta:
0.554
Beta in relation to Nasdaq (XNAS):
0.554
Beta in relation to all global stocks::
0.737
Beta Comparison & Analysis
Beta of competitors/peers::
0.871
Beta is 1.00% higher than peers
Average Industry Beta:
1.065
Beta is -17.42% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.18%
Sustainable growth rate is -60.24% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.089
Alpha is -282.13% below industry average alpha yield
Alpha is -570% below the market average
Analysis of Cost of Capital of
VREX
Equity cost of capital:
0.092
Equity cost of capital is -12.17% below industry mean WACC
Unlevered (without debt) cost of capital:
5.78%
Before-tax cost of debt:
8.94%
After-tax cost of debt:
7.06%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
7.06%
WACC is 7.21% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$21.33
Revenue growth rate per share of (3Y):
1.69
Annual revenue growth rate is -99.46% below industry average
EPS:
$0.71
Expected Annual growth rate of EPS (3Y):
13.53%
Expected future EPS growth rate is 16.86% higher than the Medical Devices industry
Free cash flow (FCF) per share:
$1.53
-
-
Debt per share
$11.30
EBITDA per share
$3.08
Valuation Analysis Today of
VREX
P/E Ratio:
34.75
P/E Ratio of Competitors/Peers:
144.25
P/E ratio is -75.91% lower than main peers & is -85.73% lower than the industry
Stock price/value with industry average P/E ratio: $172.92
VREX is -87.58% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.01
Price to sales ratio is -89.18% below the industry mean
P/B (Price to book value ratio):
1.69
Price to free cash flow: 14.08
-
Net income growth rate (3Y):
-38.98%
Net income growth rate is -140.13% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
91.52%
Net debt to equity ratio:
61.26%
Debt to assets ratio:
39.60%
Net debt to assets ratio:
26.51%
Debt-to-asset ratio is 2.20% above industry average
Ability to repay debt:
Interest coverage ratio:
2.99
Interest coverage ratio is -77.56% less than industry average
Looking forward:
Debt growth rate:
-0.43%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.395
Statistical significance of correlation:
VREX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.468
Stock price is -15.45% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.468
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.057
Kurtosis
20.651
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.508
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
VREX
Gross Profit Margin Ratio:
134%
Operating Profit Margin Ratio:
10.90%
Operating profit margin is -163.87% lower than the industry
Net Profit Margin Ratio:
134%
Effective Tax Rate:
35.74%
Effective tax rate is -34.92% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.03%
Return on equity (ROE) is -161.47% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.61%
Return on assets (ROA) is -177.35% lower than the industry
Financial Leverage:
1.7x
Current Ratio:
3.72
Current ratio is -42.43% below industry average
Cash Conversion Cycle (days):
48.7
Cash conversion cycle is -12.74% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
11.45%
In-depth Efficiency Analysis
Revenue generated per employee:
386.8K
Each employee generates 3% more revenue than industry average revenue per employee
EBITDA generated per employee:
55.9K
Each employee generates 794% more EBITDA than industry average revenue per employee
Profit generated per employee:
13.5K
Each employee generates -145% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.0K
Each employee generates -121% less free cash flow than industry average revenue per employee
Assets/Capital per employee
264.1K
Each employee generates -121% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -8.87%
Growth rate in R&D investment/expenditure is 6665.96% higher than the industry
Competitors/Peer firms of
VREX
ANAVEX LIFE SCIENCES CORP. (XNAS:AVXL)
MorphoSys AG (XNAS:MOR)
AMPHASTAR PHARMACEUTICALS INC (XNAS:AMPH)
REVANCE THERAPEUTICS, INC. (XNAS:RVNC)
CRINETICS PHARMACEUTICALS, INC. (XNAS:CRNX)
ATRION CORPORATION (XNAS:ATRI)
RAPT THERAPEUTICS, INC. (XNAS:RAPT)
INNOVIVA, INC. (XNAS:INVA)
PURETECH HEALTH PLC (XNAS:PRTC)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�0%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
851.00M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
565.70M
285.30M
73.60M
-
118.90M
-
-
192.50M
200.00K
41.10M
35.40M
123.00M
92.80M
29.70M
47.00M
16.80M
29.70M
Statement of Cash Flow
Date:
Period:
8.60M
Differed Income Tax :
200.00K
Stock Based Compensation :
3.40M
Change in Working Capital :
- 9500.00K
Accounts Receivables:
28.40M
Other Working Capital:
- 500.00K
Other Non-Cash Items:
6.70M
Net Cash Provided by Operating Activities:
10.80M
Investments in PP&E:
- 4100.00K
Net Acquisitions:
1.70M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
157.80M
-
157.80M
127.10M
247.60M
25.40M
557.90M
158.80M
291.20M
46.40M
49.20M
1.60M
33.90M
581.10M
-
1.14B
71.60M
8.70M
-
8.60M
61.00M
149.90M
451.00M
32.00M
483.00M
-
632.90M
400.00K
34.90M
- 500.0K
458.00M
December 31, 2021 at 12:00:00 AM
758.20M
492.80M
1.13B
-
459.70M
301.9M
-
- 200.00K
- 2600.00K
- 300.00K
-
-
-
5.30M
5.00M
- 100.00K
13.10M
159.20M
146.10M
10.80M
- 4100.00K
6.70M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
VREX
2023
2024
2025
2026
2027
$22.86
$53.26
$56.41
$59.74
$63.27