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Varex Imaging (VREX): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jul 3, 2026, filed Aug 10, 2026; rules v1.1
Varex Imaging (VREX): 0 rules of 10 triggered on the filings to Jul 3, 2026. 1 to review; 2 with insufficient data; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Adjusted profit = economic profit To review · confidence low
Adjusted EPS was 10% or more above GAAP in 2 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow did not rise ($20M → $19M): the trap does not arise.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $47M |
| Operating cash flow | $42M |
| Capex, year before | $27M |
| Capex | $23M |
| Free cash flow, year before | $20M |
| Free cash flow | $19M |
| Change in FCF | −$2M |
| Change in capex | −$4M |
| Working capital: change in its cash contribution | −$33M |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.8% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $15M |
| Revenue | $845M |
| SBC / revenue | +1.8% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 40.8M shares |
| Diluted shares | 41.4M shares |
| Diluted shares: change | +1.5% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 6% against revenue 4% in Q3 FY26; DSO 63 against a median of 63: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | +3.7% |
| Receivables, year over year | +5.6% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +1.5% |
| Receivables y/y, quarter before | +1.7% |
| Days sales outstanding | 63.3 |
| DSO, median of eight quarters | 63.4 |
| Receivables | $145M |
| Revenue | $210M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit To review confidence low
Adjusted EPS was 10% or more above GAAP in 2 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 0.19 / 0.05 / 0.737; 2026-03-31 / 0.21 / -0.19 / 1.905; 2026-06-30 / 0.31 / 0.37 / -0.194 |
| Quarters with adjusted ≥ 10% above GAAP | 2 |
| Quarters compared | 3 |
| Latest gap | -19.4% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-12-31 (adjusted 0.19 vs GAAP 0.05) · 2026-03-31 (adjusted 0.21 vs GAAP -0.19) · 2026-06-30 (adjusted 0.31 vs GAAP 0.37)
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Not triggered confidence medium
$2M comes due within a year, 66.1× covered by cash and investments of $99M.
The figures and how they are read
| Cash and investments | $99M |
| Debt | $347M |
| Net debt | $248M |
| Due within a year | $2M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | −$20M |
| Cash plus free cash flow | $99M |
| Coverage of what is due | 66.1 |
| Due in the second year | $368M |
| Balance sheet date | 2026-07-03 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY25 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not applicable
a loss in one of the quarters: EPS growth has no meaning
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Varex Imaging: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.