Varex Imaging stock barely budged today, up less than 1%, which might suggest a routine quarter. The earnings story is anything but routine. After a recent stretch that included quarterly losses, Varex Imaging just posted positive basic earnings per share and a solid net income for Q3 on roughly US$210 million of revenue.

The key consideration for you as an investor now relates to timing. In the short term, the stock trades on a rich P/E multiple with only modest recent share price gains. Over a longer horizon, analysts project strong earnings growth and a discounted cash flow value that they estimate to be far above where the stock closed today.

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Q3 2026 Earnings Summary

• Revenue (Q3 2026 vs. Q3 2025): US$210.5 million vs. US$203.0 million (change of about 3.7%)
• Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): US$15.7 million vs. a loss of US$89.1 million (returned to profit)
• Basic EPS (Q3 2026 vs. Q3 2025): US$0.37 vs. a loss of US$2.15 per share (returned to positive earnings per share)
• Trailing 12 Month Revenue (Q3 2026 TTM vs. Q3 2025 TTM): US$865.0 million vs. US$821.4 million (change of about 5.3%)

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Varex Imaging bull case scores on earnings reset

Bulls argue that Varex Imaging is shifting toward higher quality, more recurring earnings supported by cost competitive manufacturing and better product mix. The latest quarter shows some early proof points. Revenue of about US$210 million and trailing 12 month revenue of US$865.0 million point to a business that is at least holding demand while returning to profit. Net income swung from a loss of US$89.1 million a year ago to US$15.7 million, with basic EPS moving from a loss of US$2.15 to US$0.37. That supports the view that margins can recover after prior disruption and goodwill impairment. The narrative around more resilient earnings from services and software is not yet clearly quantified here. However, the clean return to profitability without extra items is a key milestone for anyone looking for evidence that the reset phase is starting to work.

Bear case on volatility and concentration not cleared

Bears focus on earnings volatility, execution risk in Medical and Industrial markets, and concentration in regions such as China. The swing from a loss of US$89.1 million to net income of US$15.7 million within a year indicates that earnings are still sensitive to mix, pricing and past impairments. While Q3 shows profit, it follows a period of quarterly losses, which supports concerns that net margins may not yet be stable. The earlier goodwill impairment remains a reminder that some prior acquisitions did not deliver as planned. Revenue exposure of roughly 15% to China also leaves the thesis about regulatory and geopolitical risk intact. With the stock up less than 1% on the day and only modest multi month gains, the market reaction suggests that investors see progress but not enough evidence yet that the more cyclical and regional risks have been structurally reduced.

Access the Varex Imaging analyst estimates for Varex Imaging to see where the consensus models start to diverge on revenue, margins and EPS, and whether the calm share price today masks a sharper inflection point over the next few years.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.