Varian (VAR) Eclipse Software Named Category Leader by KLAS

Palo Alto, CA-based Varian Medical SystemsVAR recently announced that its Eclipse treatment planning software has been named 2017 Category Leader for Oncology Treatment Planning by KLAS. Notably, KLAS is an independent research firm specializing in monitoring and reporting on the performance of healthcare vendors.

Varian stock over the past one year registered a return of almost 5.58%. However, this was lower than the Zacks categorized Medical Instruments sub-industry's gain of roughly 16.62%. Currently, the stock promises an earnings yield of 4.90% compared with the industry's negative yield of 4.87%.

Coming back to the news, the Eclipse treatment planning software has received this recognition from KLAS for the fourth year in a row. The KLAS report published at the end of January ranks healthcare vendors and their solutions based upon feedback from professionals who use them.

Eclipse software is in use at some 3,400 cancer treatment centers around the world. The software creates an optimized radiotherapy treatment plan based on a physician's dose instructions, and information on the size, shape and location of the tumor to be treated with radiation.

Of late, Varian has been gaining prominence, courtesy of its solid oncology business prospects. We note that the company addresses both tier 1 and mid-tier markets through its Edge, Truebeam and VitalBeam products.

We are particularly upbeat about Varian Medical's recent takeover of the Medical Imaging business of PerkinElmer Inc. PKI . Considering the bountiful opportunities for diagnostic imaging in the global space, this development is a significant positive for long-term growth. In this regard, a research report by Markets And Markets reveals that niche markets are expected to reach a worth of $33.42 billion globally by 2020, multiplying at a CAGR of 6.2%.

Moreover, the company's Oncology segment holds considerable promise. Service constitutes about one-third of Oncology revenues and is recurring in nature. The segment is expected to grow further as the company expands its installed base in overseas markets, particularly in China and Japan.

On the flipside, increasing local competition is a primary headwind. Moreover, the Imaging Components' business spin-off will remain an overhang on the stock, at least in the near term.

Zacks Rank & Key Picks

Currently, Varian has a Zacks Rank #5 (Strong Sell).

Some better-ranked medical stocks are Avinger, Inc. AVGR and Fluidigm Corporation FLDM . Both the stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Avinger projects sales growth of 2.3% for the current year. Additionally, the company posted a positive earnings surprise of 27% in the last quarter.

Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock has added 1.7% over the last three months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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