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Varex Imaging Corp – Surgical and Medical Instrument Manufacturing
Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors and other image processing solutions that are key components of X-ray imaging systems. With a 70+ year history of successful innovation, Varex's products are used in medical imaging as well as a number of industrial applications. Global OEM manufacturers incorporate Varex's X-ray sources, digital detectors, connecting devices and imaging software in their systems to detect, diagnose, protect and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,000 people located in North America, Europe, and Asia.
Analysis Results
Intrinsic Value $2,390.37
Latest Price $21.53
Relative Value 99% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 73.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 73.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.618 0.58
2023 1.07 0.946
2024 1.87 1.54
2025 3.25 2.52
2026 5.65 4.11
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 125 billion. This corresponds to a present value of 85.4 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.69 billion. Adding in the terminal value gives a total present value of 95.1 billion.

There are presently 39.8 million outstanding shares, so the intrinsic value per share is 2390.37.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,108,400,000
Current Cash 289,200,000
Current Liabilities 333,200,000
Current Debt 5,600,000
Non-Cash Working Capital (NCWC) 491,600,000
Change in NCWC 228,300,000
EBIT 141,400,000
Tax Provision 21,400,000
Depreciation and Amortization 74,600,000
Capital Expenditure -30,200,000
Unlevered Free Cash Flow 361,198,601
Current Assets 522,000,000
Current Cash 100,600,000
Current Liabilities 160,600,000
Current Debt 2,500,000
Non-Cash Working Capital (NCWC) 263,300,000
Change in NCWC -800,000
EBIT -30,900,000
Tax Provision -15,200,000
Depreciation and Amortization 39,500,000
Capital Expenditure -23,500,000
Unlevered Free Cash Flow -15,700,000
Current Assets 438,400,000
Current Cash 29,900,000
Current Liabilities 175,100,000
Current Debt 30,700,000
Non-Cash Working Capital (NCWC) 264,100,000
Change in NCWC -15,100,000
EBIT 48,200,000
Tax Provision 5,700,000
Depreciation and Amortization 39,200,000
Capital Expenditure -19,800,000
Unlevered Free Cash Flow 39,721,395
Current Assets 458,100,000
Current Cash 51,900,000
Current Liabilities 152,000,000
Current Debt 25,000,000
Non-Cash Working Capital (NCWC) 279,200,000
Change in NCWC -1,000,000
EBIT 48,400,000
Tax Provision -2,600,000
Depreciation and Amortization 42,200,000
Capital Expenditure -20,400,000
Unlevered Free Cash Flow 69,200,000
Current Assets 495,300,000
Current Cash 83,300,000
Current Liabilities 151,800,000
Current Debt 20,000,000
Non-Cash Working Capital (NCWC) 280,200,000
Change in NCWC 34,600,000
EBIT 85,000,000
Tax Provision 22,800,000
Depreciation and Amortization 27,400,000
Capital Expenditure -20,200,000
Unlevered Free Cash Flow 100,890,909
Current Assets 359,900,000
Current Cash 36,500,000
Current Liabilities 77,800,000
Current Debt 0
Non-Cash Working Capital (NCWC) 245,600,000
Change in NCWC 28,700,000
EBIT 107,500,000
Tax Provision 36,000,000
Depreciation and Amortization 15,300,000
Capital Expenditure -28,900,000
Unlevered Free Cash Flow 85,742,857

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