Here's Why You Should Invest in Varian Medical (VAR) Now
Varian Medical Systems, Inc. VAR is currently one of the top-performing stocks in the U.S. MedTech space. The company’s broad product spectrum, strong second-quarter fiscal 2018 results and a solid international foothold deserve a mention.
The company has a positive average earnings surprise of 4.4% for the trailing four quarters. In the last 60 days, three estimates have moved north, with no change in the Zacks Consensus Estimate for earnings.
In the past six months, shares of Varian Medical have gained 9.1% against the industry’s decline of 7.3%. The current level is also higher than the S&P 500’s return of 5.3%.
Let’s take a look at why this Zacks Rank #2 (Buy) company makes a tempting addition for your portfolio now.
Why Should You Invest?
Strong Q2 Results
Varian Medical posted stellar second-quarter fiscal 2018 results, with earnings and revenues surpassing the respective Zacks Consensus Estimate. While earnings improved 27.8% on a year-over-year basis, revenues rose 10.1% from a year ago.
The company’s flagship Halcyon platform majorly drove revenues in the quarter. Since its inception in 2017, Halcyon received 81 orders, reflecting strong demand for the platform.
Growth in the Oncology segment also drove revenues, with gross orders totaling $664 million in the reported quarter.
Product Portfolio Solid
Varian Medical has been gaining on a diversified gamut of products. The Halcyon radiotherapy treatment system is a noted one, designed to offer cost-effective cancer care. Notably, the platform has received 510(k) clearance and CE Mark from the European directive, allowing Varian Medical to start selling the system in the United States.
Recently, Varian Medical has new imaging technologies in the Halcyon 2.0 treatment system to expand its capabilities and ability to deliver high-quality cancer care globally.
In radiotherapy, the HyperArc platform, a high definition radiotherapy technology, deserves a special mention. It is designed to treat multiple metastases brain cancer cases and has seen robust demand so far.
Recently, the company launched a new version of its existing Velocity software solution, which includes Rapidsphere, a module for Selective Internal Radiation Therapy (SIRT) dosimetry analysis. It enables cancer care teams to perceive tumor response and normal-tissue toxicity for individual patients receiving SIRT.
Global Foothold
Varian Medical foresees substantial opportunity in cancer care in emerging markets.
In the second quarter, Asia-Pacific revenues grew 2% year over year. Greater China maintained growth in the quarter. Japan has also been a profitable space for Varian Medical. Moreover, in Europe, Middle East, India and Africa geography, revenues grew significantly.
The company has also expanded its reach through strategic overseas buyouts. Recently, Varian Medical signed an agreement to acquire Sirtex, an Australian-based company focused on interventional oncology therapies. Additionally, Cooperative CL Enterprises, a leading distributor of radiotherapy equipment in Taiwan, has been acquired by Varian Medical.
Other Key Picks
Other top-ranked stocks in the broader medical space are ABIOMED, Inc. ABMD, Genomic Health, Inc. GHDX and Exelixis, Inc. EXEL.
ABIOMED has a long-term growth rate of 27%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health has an expected growth rate of 187.5% for the current quarter. The stock sports a Zacks Rank #1.
Exelixis has a projected growth rate of 75% for the current quarter. The stock sports a Zacks Rank #1.
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