VREX Should I Buy
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Varex Imaging Corp (VREX) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is currently oversold based on RSI, but the negative financial performance, declining net income, and lack of strong positive catalysts make it a hold rather than a buy. The investor should wait for clearer signs of recovery or improved financials before considering an entry.
The MACD is negative and expanding, indicating bearish momentum. RSI is at 11.292, signaling an oversold condition. Moving averages are converging, and the stock is trading near its S2 support level of 11.358, suggesting a potential bounce but no confirmed reversal yet.
The company has announced a conditional redemption of its senior secured notes, which could improve its financial structure if executed successfully. Analysts have raised the price target to $18 with a Buy rating, citing strength in the industrial segment.
The company's Q1 financials show a significant decline in net income (-866.67% YoY) and EPS (-600.00% YoY). Gross margin has also dropped slightly. The redemption of notes is contingent on new financing, adding uncertainty. The stock has dropped 8.35% in regular market trading, reflecting negative sentiment.
In Q1 2026, revenue increased by 4.90% YoY to $209.6 million. However, net income dropped significantly to $2.3 million (-866.67% YoY), and EPS fell to 0.05 (-600.00% YoY). Gross margin decreased to 33.3%, down 2.86% YoY, reflecting weaker profitability.
B. Riley raised the price target to $18 from $16 and maintained a Buy rating, citing strength in the industrial segment. However, this is offset by the company's weak financial performance in Q1 2026.
