Varex Imaging Stock Takes Sharp Fall as Investors React to Conservative FY26 Outlook

2025-12-19 21:05:39

Varex Imaging Corporation (VREX) shares experienced a sharp selloff following the release of its full-year 2025 earnings and forward guidance, with the stock dropping $1.57 to close at $10.28, representing a 13.28% decline. The steep market reaction underscores investor concerns about the company’s growth trajectory despite solid topline results in the current period.

Strong Q4 Performance Fails to Offset Outlook Concerns

The company’s fourth quarter demonstrated notable momentum, with revenues climbing 11% year-over-year to $229 million. This performance was anchored by robust expansion in the Industrial segment, which surged 25%, alongside steady gains in its CT tube operations. For the complete fiscal year, Varex posted $845 million in revenue, reflecting approximately 4% annual growth.

However, the bottom-line results painted a less encouraging picture. The company reported a net loss of $1.70 per share for FY25, signaling profitability challenges despite the revenue expansion.

Forward Guidance Triggers Market Caution

The cautious outlook for FY26 appears to have driven the market’s negative reaction. Management projected first-quarter revenues between $200 million and $215 million, alongside adjusted earnings per share guidance of $0.05 to $0.25. These conservative forecasts suggest anticipated headwinds in the medical components business segment, raising questions about the sustainability of growth.

Market Reaction and Trading Dynamics

The announcement prompted a significant surge in trading volume as market participants reassessed the company’s prospects. Varex’s 52-week trading range extends from approximately $9.40 to $20.80, indicating considerable volatility. The stock’s sharp fall reflects the market’s skepticism regarding near-term operational improvements and the company’s ability to navigate weakening demand in key end markets.

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