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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cepheid and Varex Imaging, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cepheid 0 9 0 0 2.00
Varex Imaging 0 1 1 0 2.50

Cepheid currently has a consensus target price of $52.67, indicating a potential downside of 0.54%. Varex Imaging has a consensus target price of $33.50, indicating a potential upside of 14.10%. Given Varex Imaging’s stronger consensus rating and higher probable upside, analysts plainly believe Varex Imaging is more favorable than Cepheid.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cepheid N/A N/A N/A ($0.69) -76.74
Varex Imaging $654.50 million 1.69 $115.80 million N/A N/A

Varex Imaging has higher revenue and earnings than Cepheid.

Profitability

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

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

Insider & Institutional Ownership

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

Summary

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

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.

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.

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