Varian Medical Systems (VAR) vs. Its Peers Critical Review

Varian Medical Systems (NYSE: VAR) is one of 78 public companies in the “Advanced Medical Equipment & Technology” industry, but how does it compare to its competitors? We will compare Varian Medical Systems to similar companies based on the strength of its analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Insider & Institutional Ownership

99.2% of Varian Medical Systems shares are owned by institutional investors. Comparatively, 51.8% of shares of all “Advanced Medical Equipment & Technology” companies are owned by institutional investors. 0.9% of Varian Medical Systems shares are owned by insiders. Comparatively, 18.2% of shares of all “Advanced Medical Equipment & Technology” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Varian Medical Systems and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varian Medical Systems 2 7 1 0 1.90
Varian Medical Systems Competitors 275 1888 3375 106 2.59

Varian Medical Systems presently has a consensus price target of $98.39, suggesting a potential downside of 9.95%. As a group, “Advanced Medical Equipment & Technology” companies have a potential downside of 6.79%. Given Varian Medical Systems’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Varian Medical Systems has less favorable growth aspects than its competitors.

Profitability

This table compares Varian Medical Systems and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varian Medical Systems 8.85% 23.68% 10.74%
Varian Medical Systems Competitors -151.89% -22.51% -8.72%

Earnings & Valuation

This table compares Varian Medical Systems and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Varian Medical Systems $2.67 billion $249.60 million 40.62
Varian Medical Systems Competitors $2.14 billion $234.27 million -30.90

Varian Medical Systems has higher revenue and earnings than its competitors. Varian Medical Systems is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Varian Medical Systems has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Varian Medical Systems’ competitors have a beta of 1.23, indicating that their average stock price is 23% more volatile than the S&P 500.

Summary

Varian Medical Systems beats its competitors on 7 of the 13 factors compared.

About Varian Medical Systems

Varian Medical Systems, Inc. is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Company also has Varian Particle Therapy (VPT) and the operations of the Ginzton Technology Center (GTC). Its VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, another form of external beam radiotherapy using proton beams for the treatment of cancer. Its ProBeam system is capable of delivering intensity modulated proton therapy (IMPT) using pencil beam scanning technology. Its ProBeam Compact is a single room proton therapy product.

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