Hold On To Varian Medical Systems In 2018

Apr. 06, 2018 12:59 PM ETVarian Medical Systems, Inc. (VAR)4 Comments
Healthcare on the Move profile picture
Healthcare on the Move


  • There is much scope to grow in the radiotherapy market across the world.
  • Innovative products such as Halcyon platform and HyperArc platform are expected to drive Varian's growth in 2018.
  • Varian is leveraging its software and services capability to transition from a product based company to one providing integrated human-centered cancer treatment.
  • Varian is already a leader in the upcoming proton therapy segment.
  • However, certain company-specific risks have to be considered while investing in Varian.

A global leader in the radiation oncology segment, Varian Medical Systems (NYSE:VAR) is now striving hard to transform itself from a product company to an integrated human-centered cancer treatment provider. And the long-term strategy of the company is to expand its addressable market size from $7.3 billion in 2017 to $12.3 billion by the year 2022 by focusing on patient-centered care coordination. This will ultimately result in meaningful footprint expansion for Varian Medical Systems, not only in new segments but also in new geographies.

I strongly believe that today, Varian Medical Systems is in a sweet spot, all set to capitalize on existing as well as new opportunities in radiation oncology segment, in both developed and developing economies. The target price of $130, set by Barrington Research in January 2018, seems more reflective of the true potential of this stock.

While the company's current share price may not be a very attractive entry point, it is definitely a point where you want existing investors to hold on to this stock to enjoy some nice returns in the coming months.

In this article, I will be explaining my hypothesis for recommending Varian Medical Systems as a hold opportunity for 2018, in greater detail.

There is significant growth opportunity available in the radiation therapy market across the world.

The global radiation therapy market seems to be picking up, growing at 4.5% (linked above) in the 12 trailing months from October 2016 to September 2017, and Varian Medical Systems is well placed to capitalize on this opportunity. The company boasted of an installed base of 7,876 linac units (linked above) at end of Q1 2018 and expects to grow this number to 10,000 by the year 2022. The company also plans to expand its annually treated patient base from 3 million to 6

This article was written by

Healthcare on the Move profile picture
I am an MBA in finance and an engineering graduate. I have also completed the CFA certification.I am involved in international trade and have been passionately tracking global equity markets for more than 7 years. I mainly focus on spotting long-term value investments in biotechnology, pharmaceutical, hospital, and medical device sectors. In the last two years, I have also been studying cannabis and hemp sectors.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (4)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.