Varex Imaging Corp

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 2✗ 26▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio1.6x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value7.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=7.1%, ROC=13.5%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)18.1x

  ✗Dreman< 8x

  Price / Book Value per Share1.6x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation Reasonableness

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=2.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=1.6x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share40.1x

  ✗Ackman<= 25

  Price vs. Trailing Low249% of trailing low ($7.28)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+2.88%; #2416/6340 (top 38.1%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.6461; #2370/6449 (top 36.7%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share2.90x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-1.6%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+1.1254; #1639/5247 (top 31.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-2.63%; #2810/4519 (top 62.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+55.36%; #591/6202 (top 9.5%)

  ✓OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 5▾

  VREX overvalued: all 5 models price fair value below $18.10 (median $5.40)

  Greenblatt fair value$5.14

  ✗Greenblatt-252.1% margin vs $18.10

  Munger fair value$5.40

  ✗Munger-235.2% margin vs $18.10

  Akre fair value$10.32

  ✗Akre-75.4% margin vs $18.10

  Marks fair value$3.27

  ✗Marks-453.5% margin vs $18.10

  Ackman fair value$7.12

  ✗Ackman-154.2% margin vs $18.10
• Profitability13% pass✓ 5✗ 30▾

  14 of 16 flag VREX's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)8/12 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)-130.3%

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)8/12 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-1.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-3.3% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)3.18

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE4.5%

  ✗Lynch> 15%

  EBIT / Enterprise Value7.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=7.1%, ROC=13.5%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-6.35%

  ✗PiotroskiROA > 0

  ROA Change YoY-4.02% -> -6.35% (delta: -2.33%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=3.77%, ROA=-6.35%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY31.7% -> 34.4%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue3.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity4.5%

  ✗Dreman> 12%

  Margin of SafetyP/B=1.6x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-5.2% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency8/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue8.3%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity4.5%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend8.6% (2023) -> -3.3% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 32.5% -> 34.4%, operating margin 8.6% -> -3.3%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+2.88%; #2416/6340 (top 38.1%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+26.99%; #1591/3702 (top 43.0%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+4.45%; #2516/5226 (top 48.1%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0396; #2279/5884 (top 38.7%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR8.4% over 5 years

  ✓Neff7%-20% annualized

  Positive Diluted-EPS Years7/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts13% pass✓ 2✗ 14▾

  Split decision: 13 FAIL · 1 PASS · 1 BUY · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (3/9)✗BuffettFAIL (0/9)✗LynchFAIL (0/7)✗GreenblattRank #1069✓PiotroskiPASS (F-Score 5)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)✗AckmanFAIL (3/9)✗TempletonFAIL (2/8)✗SleepFAIL (2/6)✓AsnessBUY (Rank #463/2370 (Top 19.5%))✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Growth25% pass✓ 3✗ 10▾

  6 of 8 flag VREX's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)-130.3%

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 16.2% vs Rev: 5.3%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$2.12 (2015) -> $-1.70 (2025)

  ✗DremanPositive over recent years

  EPS CAGR-8.1% CAGR over 8 years

  ✗Dreman> 5% annualized

  Positive Net Income Frequency8/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth4.0%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 32.5% -> 34.4%, operating margin 8.6% -> -3.3%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR2.7%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR8.4% over 5 years

  ✓Neff7%-20% annualized
• Cash Flow30% pass✓ 4✗ 8▾

  7 of 10 flag VREX's cash flow — Buffett, Lynch, Dreman +4 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing$-20.2M

  ✗LynchPositive and growing

  Operating Cash Flow$41.7M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=3.77%, ROA=-6.35%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)18.1x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=2.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive9/11 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-2.7%

  ✗Ackman>= 4%

  Price / FCF per Share40.1x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency11/11 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-20.2M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-2.63%; #2810/4519 (top 62.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency38% pass✓ 4✗ 7▾

  5 of 8 flag VREX's efficiency — Buffett, Greenblatt, Munger +2 more

  Current Ratio3.38

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)4.6%

  ✗Buffett> 10%

  ROIC - WACC-5.4%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)13.5%

  ✗Greenblatt> 25%

  Current Ratio Change YoY3.32 -> 3.43

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.67x -> 0.76x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities3.38

  ✓Dreman> 1.5

  Return on Invested Capital6.8%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=6.0%; FY2024: ROIC=2.6%; FY2025: ROIC=-2.6%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -2.6%)

  ✗SleepROIC > 12% in a majority of years
• Debt & Leverage42% pass✓ 7✗ 8▾

  7 of 12 flag VREX's debt & leverage — Buffett, Lynch, Piotroski +4 more

  LT Debt vs Net Current AssetsLT Debt $328.9M vs NCA $445.7M

  ✓GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.70, IC: 1.9x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.70

  ✗Lynch< 0.33

  Cash - Long-term Debt$-229.7M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change32.72% -> 33.05%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities3.38

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.70

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.70

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-0.9x, D/EBITDA=N/A (D&A unavailable)

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.70

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.6990; #2838/4210 (top 67.4%)

  ✗AsnessTop 30% of eligible cross-section