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.