Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Varian Medical Needs Room To Grow

While being successful enough to dominate your market is normally a good thing, it does create some valid questions about how Varian (NYSE:VAR) will continue to generate impressive FCF growth when it already has about 60% share of a market that is expected to grow less than 5% a year in the future. Faster-growing emerging markets like China can help, as can the growth of emerging product categories like proton beam therapy, but strong market share, good margins, and reimbursement pressure do create some concerns.

Varian's shares look slightly undervalued to me today and that's not a common experience in the many years I've followed the stock. While I own the much riskier and more undervalued Accuray (NASDAQ:

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