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Varian (VAR) Hits a 52-Week High: What's Driving the Stock?
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Shares of Varian scaled a new 52-week high of $147.06 on Jan 8, closing the session marginally lower at $146. In fact, the stock has rallied nearly 10.9% since its fourth-quarter fiscal 2019 earnings announcement on Nov 22.
Solid growth in core oncology segment, profitable acquisitions and a solid guidance for fiscal 2020 have prompted the rally.
Let us take a closer look at the factors driving growth.
Robust Q4 Earnings
The company exited the fourth quarter of fiscal 2019 on a promising note, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. Revenues at the oncology segment rose 8.5% during the quarter driven by a surge in gross orders and expansion of net installed base.
Gross margin in the reported quarter was up 150 bps, while operating margin expanded 50 bps.
The lifted revenue outlook for fiscal 2020 buoys optimism among investors, indicating the continuation of this bullish trend through the year.
Other Encouraging Factors
Market has been upbeat about Varian’s recent acquisition of Cancer Treatment Services International. The collaboration is expected to boost Varian Medical’s core Oncology Systems business.
The company also recently announced an asset purchase agreement to acquire Boston Scientific’s portfolio of drug-loadable microsphere and bland embolic bead products for $90 million. This will strengthen Varian’s interventional oncology segment. Investors have also been optimistic about the company’s prospects since it announced the acquisitions of CyberHeart, Endocare and Alicon.
Meanwhile, Varian has been having a great run on the bourses in the past year. The stock has rallied 18.4% versus the broader industry’s growth of 14.8%. The company currently has a market cap of $13.29 billion.
Haemonetics has a projected long-term earnings growth rate of 13.5%.
West Pharmaceutical Services has an expected long-term earnings growth rate of 14%.
Omnicell has a long-term earnings growth rate of 12.5%.
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Varian (VAR) Hits a 52-Week High: What's Driving the Stock?
Shares of Varian scaled a new 52-week high of $147.06 on Jan 8, closing the session marginally lower at $146. In fact, the stock has rallied nearly 10.9% since its fourth-quarter fiscal 2019 earnings announcement on Nov 22.
Solid growth in core oncology segment, profitable acquisitions and a solid guidance for fiscal 2020 have prompted the rally.
Let us take a closer look at the factors driving growth.
Robust Q4 Earnings
The company exited the fourth quarter of fiscal 2019 on a promising note, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. Revenues at the oncology segment rose 8.5% during the quarter driven by a surge in gross orders and expansion of net installed base.
Gross margin in the reported quarter was up 150 bps, while operating margin expanded 50 bps.
The lifted revenue outlook for fiscal 2020 buoys optimism among investors, indicating the continuation of this bullish trend through the year.
Other Encouraging Factors
Market has been upbeat about Varian’s recent acquisition of Cancer Treatment Services International. The collaboration is expected to boost Varian Medical’s core Oncology Systems business.
The company also recently announced an asset purchase agreement to acquire Boston Scientific’s portfolio of drug-loadable microsphere and bland embolic bead products for $90 million. This will strengthen Varian’s interventional oncology segment. Investors have also been optimistic about the company’s prospects since it announced the acquisitions of CyberHeart, Endocare and Alicon.
Meanwhile, Varian has been having a great run on the bourses in the past year. The stock has rallied 18.4% versus the broader industry’s growth of 14.8%. The company currently has a market cap of $13.29 billion.
Zacks Rank & Stocks Worth a Look
Varian currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks from the broader medical space are Haemonetics Corporation (HAE - Free Report) , West Pharmaceutical Services (WST - Free Report) and Omnicell (OMCL - Free Report) . While Haemonetics sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics has a projected long-term earnings growth rate of 13.5%.
West Pharmaceutical Services has an expected long-term earnings growth rate of 14%.
Omnicell has a long-term earnings growth rate of 12.5%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
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