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Varian Showcases Halcyon System at DEGRO Meet, Stock Up

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Palo Alto, CA-based manufacturer of medical devices and software, Varian Medical Systems, Inc. recently showcased a new Halcyon radiotherapy treatment system at the 2017 DEGRO meeting, the German radiation oncology society, in Berlin.

The company also displayed its flagship TrueBeam radiotherapy platform, the RapidArc image-guided intensity-modulated radiotherapy system, and the fully-integrated image-guided IMPT (intensity-modulated proton therapy) ProBeam system.

Meanwhile, shares of Varian rallied almost 1% following the news release. In fact, the stock has had an impressive run on the bourse over the last one month. Varian has gained almost 8%, significantly higher than the Zacks classified Medical - Instruments sub-industry’s gain of 4.5%. Furthermore, the stock’s price level was higher than the S&P 500’s addition of 3.6% over the same time frame.

The Halcyon radiotherapy treatment system has been designed to offer cost-effective cancer care worldwide. The system has a user-friendly design and it automates, streamlines and simplifies almost every aspect of cancer treatment. Per management, the Halcyon system offers treatment for prostate, breast, head & neck, and most other forms of cancer.

Undoubtedly, Varian has been taking initiatives to gain customer attention for its broad spectrum of products. In fact, the company also introduced its new HyperArc high-definition radiotherapy system at the meeting.

Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one analyst move north in the past two months, compared to three moving south. Meanwhile, full-year estimates have seen two upward revisions, compared to no movement in the opposite direction. This has had a significant impact on the consensus estimate, as the current quarter estimates fell roughly 3% over the last three months, while full-year estimates increased 2.3%. This somewhat mixed trend justifies the company’s Zacks Rank #3 (Hold).

We note that the global radiotherapy market is expected to reach a worth of $7,544.8 million by 2020 at a CAGR of 6.2%. Taking the bountiful prospects in the global niche space into consideration, the latest development should boost investor confidence in the stock.

Key Picks

Some better-ranked stocks in the broader medical sector include Inogen Inc. (INGN - Free Report) , Luminex Corporation and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, Inogen and Luminex Laboratories sport a Zacks Rank #1 (Strong Buy), while IDEXX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen has a long-term expected earnings growth rate of 17.50%. Notably, the stock represents an impressive one-year return of 96%.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock posted a positive earnings surprise of 237.5% in the last reported quarter.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.37%. Additionally, the stock represents an impressive one-year return of 83%.

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