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Varian Medical Clinches TrueBeam System Order in Australia
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Varian Medical Systems Inc. is strengthening its international footprint through a string of order wins. Recently, Australia-based Icon Group placed an order for 10 additional TrueBeam medical linear accelerators. Icon Group had ordered five systems last year and currently has nine systems installed in its cancer centers throughout the country.
The extended deal validates the growing utility of the TrueBeam platform in the treatment of cancer. Varian will install the systems over the next two years and service them under multi-year agreements. Icon has also placed orders for the Eclipse treatment planning system and ARIA oncology information management system.
International markets are under-equipped to address the growing incidence of cancer. Varian’s strong overseas presence is expected to enable it to leverage this opportunity in emerging markets. In line with growing demand for cancer treatment in international markets, Varian’s ex-U.S. sales in Europe, Africa and particularly Asia, are growing at a faster rate than in the domestic market.
We believe China, India, Brazil, the Middle East and Africa present significant top-line growth opportunity to Varian. The company is opening new offices in Africa and the Middle East, which shows that it is aware of the growth opportunities in the region.
Moreover, Varian’s strong product pipeline is a key growth catalyst. Additionally, the planned spin-off of the Imaging Components business will improve the growth profile of the core business, in our view.
Nevertheless, the higher demand for lower-margin products in China, India and Brazil is expected to keep margins under pressure over the next several quarters.
Varian also faces severe competition, which is expected to increase product development expenditures in the nascent proton therapy market, which will again put margins under pressure. Moreover, pricing pressure in traditional radiotherapy is a major concern.
Zacks Rank & Key Picks
Varian carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical space are CryoLife , IRadimed (IRMD - Free Report) and Masimo Corp (MASI - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy).
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Varian Medical Clinches TrueBeam System Order in Australia
Varian Medical Systems Inc. is strengthening its international footprint through a string of order wins. Recently, Australia-based Icon Group placed an order for 10 additional TrueBeam medical linear accelerators. Icon Group had ordered five systems last year and currently has nine systems installed in its cancer centers throughout the country.
The extended deal validates the growing utility of the TrueBeam platform in the treatment of cancer. Varian will install the systems over the next two years and service them under multi-year agreements. Icon has also placed orders for the Eclipse treatment planning system and ARIA oncology information management system.
Global Prospects Bright
VARIAN MEDICAL Revenue (TTM)
VARIAN MEDICAL Revenue (TTM) | VARIAN MEDICAL Quote
International markets are under-equipped to address the growing incidence of cancer. Varian’s strong overseas presence is expected to enable it to leverage this opportunity in emerging markets. In line with growing demand for cancer treatment in international markets, Varian’s ex-U.S. sales in Europe, Africa and particularly Asia, are growing at a faster rate than in the domestic market.
We believe China, India, Brazil, the Middle East and Africa present significant top-line growth opportunity to Varian. The company is opening new offices in Africa and the Middle East, which shows that it is aware of the growth opportunities in the region.
Moreover, Varian’s strong product pipeline is a key growth catalyst. Additionally, the planned spin-off of the Imaging Components business will improve the growth profile of the core business, in our view.
Margin Pressure
VARIAN MEDICAL Gross Margin (TTM)
VARIAN MEDICAL Gross Margin (TTM) | VARIAN MEDICAL Quote
Nevertheless, the higher demand for lower-margin products in China, India and Brazil is expected to keep margins under pressure over the next several quarters.
Varian also faces severe competition, which is expected to increase product development expenditures in the nascent proton therapy market, which will again put margins under pressure. Moreover, pricing pressure in traditional radiotherapy is a major concern.
Zacks Rank & Key Picks
Varian carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical space are CryoLife , IRadimed (IRMD - Free Report) and Masimo Corp (MASI - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>