What happened

After the company posted mixed fiscal fourth-quarter results, shares of Varian Medical Systems (NYSE:VAR), a  provider of radiation therapy products, rose as much as 12% in early-morning trading on Wednesday. Shares were up about 8% as of 12:45 p.m. EDT.

So what

Here's a look at the key numbers from the quarter:

  • Revenue grew 11% to $802 million. This was substantially ahead of the $773 million in revenue that analysts were expecting.
  • GAAP operating earnings jumped 29% to $1.26.
  • On a non-GAAP basis, earnings per share rose 11% to $1.16. For context, Wall Street was expecting $1.20 in non-GAAP EPS.
Businessman looking at pile of money with magnifying glass.

Image source: Getty Images.

Zooming out to the full year, here's what happened:

  • Revenue jumped 11.4% to $2.92 billion.
  • Adjusted earnings rose 36% to $4.42 per share.

Finally, here's a look at the guidance that is being shared with investors for the fiscal year 2019:

  • Revenue is expected to grow 5% to 8% to $3.06 billion or $3.15 billion. This range compares favorably to $3 billion in annual revenue that Wall Street was predicting.
  • Non-GAAP EPS is projected to land between $4.60 and $4.75. The middle of this range is slightly behind the $4.76 that analysts had modeled.

Wall Street appears to be squarely focused on the top line, which is why shares are rallying today.

Now what

It's a bit surprising to see Varian's stock jump so much given the mixed results. After all, shares have enjoyed a great run over the past few years, and they are currently trading for about 24 times the midpoint of forward earnings. That's quite a rich valuation given that market watchers only expect earnings growth of about 8% over the long term.

With a tepid growth forecast and premium valuation, I'm content to root for this company's success from the sidelines and keep my attention focused on more promising healthcare stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.