Here’s What Varian Medical Systems’ Valuation Trend Indicates


Aug. 22 2018, Updated 10:31 a.m. ET

Analyst recommendations

In August, nine analysts are covering Varian Medical Systems (VAR) stock. Three of them have given the stock a “strong buy” rating, three have given it a “hold,” and three have given it a “sell.” The mean rating for VAR stock is 2.67 with a target price of $122. That implies an upside potential of 9.1% over its closing price of $111.83 on August 20.

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Peer ratings

In comparison, peers Stryker (SYK), Accuray (ARAY), Medtronic (MDT), and PerkinElmer (PKI) have mean ratings of 1.97, 2.86, 2.24, and 2.5, respectively. Their target prices are $183.93, $7.20, $95.55, and $87.25, respectively.

Valuation metrics

So far in 2018, Varian Medical Systems stock has fluctuated from $110.98 on January 2 to a high of $130.29 on January 26. After that, it has gradually corrected to the current level of $112.

The enterprise value of Varian Medical Systems is $9.66 billion, and its enterprise-value-to-revenue ratio is 3.35. The stock is trading at a forward price-to-earnings multiple of 23.30x. Its price-to-sales ratio is 3.56, and its price-to-book ratio is 6.86.

Its current ratio, a metric of how effectively a company can meet its short-term obligations, is 1.60. Its return on equity stands at 9.89%. In comparison, the returns on equity for peers Stryker (SYK), Medtronic (MDT), and PerkinElmer (PKI) are 11.08%, 6.12%, and 6%, respectively.


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