Varex Imaging (NASDAQ: VREX) and Cepheid (NASDAQ:CPHD) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Insider & Institutional Ownership

91.8% of Varex Imaging shares are held by institutional investors. Comparatively, 95.8% of Cepheid shares are held by institutional investors. 4.2% of Cepheid shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Varex Imaging and Cepheid’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varex Imaging N/A N/A N/A
Cepheid -6.88% -11.54% -5.18%

Valuation and Earnings

This table compares Varex Imaging and Cepheid’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Varex Imaging $654.50 million 1.85 $115.80 million N/A N/A
Cepheid N/A N/A N/A ($0.69) -76.74

Varex Imaging has higher revenue and earnings than Cepheid.

Analyst Ratings

This is a breakdown of current ratings for Varex Imaging and Cepheid, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varex Imaging 0 1 1 0 2.50
Cepheid 0 1 0 0 2.00

Varex Imaging currently has a consensus price target of $33.50, suggesting a potential upside of 4.33%. Given Varex Imaging’s stronger consensus rating and higher probable upside, equities analysts plainly believe Varex Imaging is more favorable than Cepheid.

Summary

Varex Imaging beats Cepheid on 7 of the 9 factors compared between the two stocks.

Varex Imaging Company Profile

Varex Imaging Corporation is a supplier of medical X-ray tubes and image processing solutions. The Company’s segments include Medical and Industrial. The X-ray imaging system manufacturers use the Company’s components for medical imaging, cargo screening and border security, to detect, diagnose and protect. The Medical business segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, special procedures, computed tomography, radiation therapy and computer-aided detection. The Industrial business segment designs, manufactures, sells and services products for use in security and industrial inspection applications, such as cargo screening at ports and borders and non-destructive examination in a range of applications.

Cepheid Company Profile

Cepheid is a molecular diagnostics company. The Company develops, manufactures and markets fully-integrated systems for testing in the Clinical and Non-Clinical markets. The Company’s systems enable molecular testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. The Company’s systems integrate these steps and analyze biological samples in test cartridges. Its primary offering is the GeneXpert system, which integrates sample preparation in addition to Deoxyribonucleic acid (DNA) amplification and detection. The GeneXpert system is designed for a range of user types ranging from reference laboratories and hospital central laboratories to satellite testing locations, such as emergency departments and intensive care units within hospitals, as well as physician offices and other alternate site laboratories. It also offers the SmartCycler system, which integrates DNA amplification and detection to allow rapid analysis of a sample.

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