Varian Medical Systems’ (VAR) imaging components business has a presence in the medical device space as well as the industrial market space. These markets present approximately $3.8 billion of addressable market opportunity. As per the company, these markets have a 4% CAGR (compounded annual growth rate).
Market drivers and growth opportunities
Varian Medical Systems is a global leader in the imaging components market. The charts below show the market share of the company in various imaging components markets.
In the medical imaging space, aging population, increasing focus on safety in radiation imaging, and emerging market demand are the key growth drivers for the company. Moreover, the analog to digital technology upgrades and China’s increasing healthcare needs provide immense growth potential for the company. The company’s leadership position in the $3 billion medical imaging market will help better leverage the market opportunities.
In the industrial imaging applications space, new safety and quality standards are being implemented, and increased focus on safety in various industrial applications is increasing demand for imaging components. Cargo scanning, borders vehicle scanning, package scanning, and packaged food safety checks are becoming more stringent, thus creating higher demand for industrial imaging components. Disruptive technologies such as 3D printing, which is increasingly used by companies such as Stryker (SYK) and Johnson & Johnson (JNJ), require safety or measurement scans possible only through imaging. Thus, the demand for imaging components is expected to witness tremendous growth.
Accuray (ARAY) is one of the major competitors of Varian Medical Systems in the United States. Investors can invest in the iShares Core S&P 500 ETF (IVV), which holds ~0.04% of its total holdings in VAR.