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Here's Why You Should Invest in Varian Medical Right Now

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Varian Medical Systems, Inc. has been on a healthy growth trajectory of late. Positive tidings on the regulatory front have lent the company a competitive edge in the MedTech space. With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick at the moment.

Varian Medical has outperformed its industry over the last three months. The stock has gained 13.2%, higher than the S&P 500’s 2.2% and the industry’s 10%.

The stock has a market cap of $11.45 billion. The company has a positive earnings surprise of 2.59% for the last four quarters. Also, it has a long-term expected earnings growth rate of 8%. 

   

The company has an impressive Growth Style Score of A. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) offer the best investment opportunities.

The company’s estimate revision trend for the current year has been encouraging as well. In the past couple of months, three estimates moved north, with no movement in the opposite direction. Earnings per share estimates rose around 2.1% to $4.31.

Let’s find out whether the recent positive trend is a sustainable one.

3 Factors Driving Varian Medical

Positive Regulatory Tidings:  Varian Medical recently announced the receipt of regulatory clearances from the U.S. antitrust authorities and the German Federal Cartel Office (FCO) for the $1.3-billion acquisition of Sirtex Medical Limited.

The transaction is expected to strengthen Varian Medical’s footprint in Australia after its close in May 2018.

Varian Medical to Equip 7 Mexico Centers: The Instituto Mexicano del Seguro Social (IMSS) has selected Varian Medical to equip seven treatment centers in Mexico with modern radiotherapy treatment systems. This includes the Edge system for image-guided stereotactic radiosurgery.

Evinance Innovation Acquisition: Varian Medical recently acquired Montreal-based privately-held Evinance Innovation, Inc. — a clinical decision support (CDS) software company. The deal was initiated last September when Varian Medical had stated that it will utilize Evinance’s patented technology to offer better services to clients.

Other Key Picks

Other top-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and PerkinElmer .

Bio-Rad Laboratories sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

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