Varian Medical Systems (VAR) Lags In After-Hours Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Varian Medical Systems ( VAR) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Varian Medical Systems as such a stock due to the following factors:

  • VAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.4 million.
  • VAR is down 6.4% today from today's close.

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More details on VAR:

Varian Medical Systems, Inc. designs, manufactures, sells, and services medical devices and software for treating cancer with radiotherapy, radiosurgery, proton therapy, and brachytherapy worldwide. VAR has a PE ratio of 19.0. Currently there are 7 analysts that rate Varian Medical Systems a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Varian Medical Systems has been 716,600 shares per day over the past 30 days. Varian Medical Systems has a market cap of $8.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.95 and a short float of 3.9% with 5.73 days to cover. Shares are up 7.2% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Varian Medical Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 26.1%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VAR's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.48% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VAR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • VARIAN MEDICAL SYSTEMS INC has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VARIAN MEDICAL SYSTEMS INC increased its bottom line by earning $3.77 versus $3.44 in the prior year. This year, the market expects an improvement in earnings ($4.02 versus $3.77).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income increased by 3.7% when compared to the same quarter one year prior, going from $108.84 million to $112.83 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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