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Accuray Incorporated (ARAY)
NASDAQ:ARAY
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Accuray
(NASDAQ:ARAY)
52Neutral
Positive Factors
Market Leadership
China has the potential to become a massive positive as Accuray is poised to become the leader in this huge emerging market.
Product Demand
Accuray Incorporated is experiencing strong demand and growth for its Cyberknife product line.
Revenue Growth
China and APAC regions are driving revenue growth significantly for Accuray Incorporated.
Negative Factors
Market Conditions
The modest guidance increase recognizes challenges like potential tariffs, currency fluctuations, and capital constraints in key markets like the U.S. and Japan.
Regional Challenges
The company faces challenges in the US and EIMEA regions, with revenue declines in these areas.
Accuray (ARAY) vs. S&P 500 (SPY)
Market Cap
$195.38M
Dividend YieldN/A
Average Volume (3M)600.04K
Price to Earnings (P/E)―
Beta (1Y)2.41
Revenue Growth1.26%
EPS Growth70.30%
CountryUS
Employees987
SectorHealthcare
Sector Strength66
IndustryMedical - Specialties
Share Statistics
EPS (TTM)-0.04
Shares Outstanding102,830,520
10 Day Avg. Volume351,586
30 Day Avg. Volume600,043
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.42
Price to Cash Flow (P/CF)26.60
P/FCF Ratio15.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.13Price Target Upside227.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Accuray Business Overview & Revenue Model
Company DescriptionAccuray Incorporated (ARAY) is a medical device company that specializes in the development, manufacture, and sale of innovative radiation therapy solutions for the treatment of cancer. The company operates within the healthcare sector, focusing on delivering precise and advanced treatment options that improve patient outcomes. Accuray's core products include the CyberKnife and TomoTherapy Systems, which are designed to provide non-invasive, personalized cancer treatment through highly accurate and adaptable radiation delivery.
How the Company Makes MoneyAccuray generates revenue primarily through the sale of its radiation therapy systems, namely the CyberKnife and TomoTherapy Systems. The company also earns money from service agreements, which involve providing maintenance and support services for its installed systems. Additionally, Accuray generates recurring revenue through the sale of accessories and software upgrades for its treatment platforms. The company's earnings are further supported by strategic partnerships and collaborations in the healthcare industry that help expand its global reach and enhance its technological capabilities.
Accuray Financial Statement Overview
Summary
The company's financials show mixed signals. While there is revenue growth, persistent net losses are concerning. The balance sheet reveals high leverage, and cash flow issues suggest liquidity challenges.Income Statement
The income statement shows a modest revenue growth from previous years, with a slight increase in TTM revenue. Gross profit margin remains stable, though net profit margin is negative due to consistent net losses, signaling profitability challenges. EBIT and EBITDA margins are positive, indicating some operational efficiency, but the persistent net losses are a concern.65
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating leverage concerns. Stockholders' equity has been decreasing, which reflects negatively on the company's financial stability. The equity ratio is low, suggesting higher reliance on debt financing. Despite this, total assets have been relatively stable over the years.50
Neutral
Cash Flow
Cash flow analysis highlights negative operating and free cash flows in the TTM period, indicating liquidity issues. The negative free cash flow to net income ratio reinforces these concerns. The company's cash flow from operations is not covering its capital expenditures, posing a challenge for sustainable growth.40
Negative
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 429.91M | 446.55M | 447.61M | 429.91M | 396.29M | 382.93M | Gross Profit |
| 159.96M | 142.92M | 153.96M | 159.96M | 159.51M | 149.87M | EBIT |
| 6.88M | 504.00K | 2.38M | 2.63M | 15.85M | 4.33M | EBITDA |
| 11.07M | 5.71M | 9.61M | 13.66M | 28.62M | 20.08M | Net Income Common Stockholders |
| -5.35M | -15.54M | -9.28M | -5.35M | -6.31M | 3.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 62.58M | 68.57M | 89.40M | 88.74M | 116.37M | 107.58M | Total Assets |
| 478.38M | 468.63M | 479.21M | 472.85M | 480.10M | 490.08M | Total Debt |
| 213.49M | 210.75M | 205.04M | 213.73M | 199.41M | 221.70M | Net Debt |
| 150.91M | 142.18M | 115.63M | 124.99M | 83.04M | 114.13M | Total Liabilities |
| 430.49M | 423.54M | 425.56M | 419.66M | 411.26M | 427.29M | Stockholders Equity |
| 47.89M | 45.08M | 53.66M | 53.19M | 68.84M | 62.79M |
| Cash Flow | Free Cash Flow | ||||
| -7.12M | -15.51M | 2.86M | -7.12M | 36.19M | -5.20M | Operating Cash Flow |
| -2.40M | -11.90M | 15.54M | -2.40M | 38.51M | -1.47M | Investing Cash Flow |
| -4.72M | -3.60M | -12.68M | -4.72M | -2.40M | -3.73M | Financing Cash Flow |
| -15.37M | -3.95M | -2.11M | -15.37M | -28.80M | 26.70M |
Accuray Technical Analysis
Negative
1.87
Price Trends
2.10
Negative
2.03
Negative
1.95
Negative
Market Momentum
-0.06
Negative
44.26
Neutral
79.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARAY, the sentiment is Negative. The current price of 1.87 is above the 20-day moving average (MA) of 1.87, below the 50-day MA of 2.10, and below the 200-day MA of 1.95, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 44.26 is Neutral, neither overbought nor oversold. The STOCH value of 79.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARAY.
Accuray Risk Analysis
Accuray disclosed 48 risk factors in its most recent earnings report. Accuray reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Accuray Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $182.37B | 79.37 | 15.62% | ― | 17.24% | 27.76% | |
73 Outperform | $22.02B | 24.90 | 7.24% | 0.87% | 3.84% | -9.29% | |
71 Outperform | $222.57B | 13.04 | 40.81% | 3.55% | 6.85% | 4577.79% | |
67 Neutral | $13.64B | 19.45 | 15.78% | ― | 1.75% | 50.25% | |
52 Neutral | $195.38M | ― | -9.15% | ― | 1.26% | 70.30% | |
49 Neutral | $6.88B | 0.82 | -52.97% | 2.48% | 20.92% | 1.17% | |
33 Underperform | $65.43M | ― | -221.11% | ― | ― | 22.50% |
* Healthcare Sector Average
Performance Comparison
ARAY
Accuray
1.87
-0.60
-24.29%
HOLX
Hologic
61.48
-16.48
-21.14%
ISRG
Intuitive Surgical
509.03
109.94
27.55%
MRK
Merck & Company
88.11
-40.04
-31.24%
ZBH
Zimmer Biomet Holdings
110.64
-20.46
-15.61%
BEAT
HeartBeam
1.94
-0.24
-11.01%
Accuray Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -24.90% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in product revenue, particularly in China, and improvement in adjusted EBITDA. However, challenges remain with regional revenue declines and service revenue impacts from prior-year anomalies. The company is optimistic about future performance with increased guidance and strategic market expansions.Highlights
Strong Year-over-Year Revenue Growth
Revenue for the quarter grew 8% year-over-year with product revenue up 19% compared to the prior year.
CyberKnife System Performance
The CyberKnife system grew revenue well above 50% year-over-year, highlighting strong demand.
China Market Success
Accuray achieved over 50% revenue growth year-over-year in China, gaining 10 points of market share.
Adjusted EBITDA Improvement
Adjusted EBITDA for the quarter was $9.6 million, up significantly from $2 million the prior year.
New Product Launches and Approvals
12 new Helix system orders booked and recent approvals for CyberKnife S7 and Synchrony in the China market.
Increased Full Year Guidance
Raised full year fiscal 2025 guidance for revenue to $463 million to $475 million and adjusted EBITDA to $28.5 million to $31 million.
Lowlights
Revenue Decline in EIMEA and AMS Regions
Revenue was down in EIMEA and AMS regions compared to last year, though expected to improve in the second half.
Service Revenue Decrease
Service revenue for the quarter was down 1% from the prior year due to a high prior-year base from ERP implementation catch-up.
Inventory and Tariff Concerns
Inflation and macro headwinds continue, with a close watch on potential tariff impacts on the business.
Company Guidance
During the Accuray Fiscal 2025 Second Quarter Financial Results Conference Call, the company provided updated guidance based on several strong performance metrics. Revenue for the quarter grew by 8% year-over-year, with product revenue increasing by 19% compared to the previous year. The company achieved adjusted EBITDA of $9.6 million, driven by pricing and operational improvements alongside successful Tomo C System deliveries. The book-to-bill ratio stood at 1.3, indicating robust order growth, particularly in the EIMEA region, which saw a 7% increase in orders. Notably, the company reported over 50% revenue growth in China and over 40% growth in Japan. Consequently, Accuray raised its fiscal 2025 full-year revenue guidance to a range of $463 million to $475 million and adjusted EBITDA to between $28.5 million and $31 million, reflecting confidence in continued strong performance and market share expansion.Accuray Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Accuray Appoints Leonel Peralta as Chief Operations Officer
Positive
Feb 7, 2025
Accuray has appointed Leonel Peralta as its Senior Vice President and Chief Operations Officer, effective February 3, 2025. Previously, Mr. Peralta served in leadership roles at Siemens Healthineers and Medtronic, bringing significant experience in global operations within the medical technology sector. The appointment is accompanied by a comprehensive employment agreement that includes a competitive salary, bonuses, and stock units, highlighting the company’s strategic focus on strengthening its leadership team.
Business Operations and StrategyFinancial Disclosures
Accuray Reports Strong Q2 Financial Results for 2025
Positive
Feb 5, 2025
On February 5, 2025, Accuray announced strong financial results for the second quarter of fiscal 2025, ending December 31, 2024, with total net revenue increasing by 8% year-over-year to $116.2 million. The company reported a net income of $2.5 million, reversing a net loss from the previous year, and noted significant demand for its Tomo C System and Helix system, particularly in emerging markets. Accuray has raised its fiscal year 2025 guidance and credits its success to strategic execution and continued innovation in product offerings, aiming to enhance cancer care and expand market presence.
Executive/Board ChangesBusiness Operations and Strategy
Accuray Appoints Leonel Peralta as COO
Positive
Jan 21, 2025
On January 21, 2025, Accuray Incorporated announced the appointment of Leonel Peralta as Senior Vice President and Chief Operations Officer, effective February 3, 2025. Peralta, with over 25 years of leadership experience in supply chain and manufacturing optimization, most recently served at Siemens Healthineers and has held positions at Medtronic Diabetes, Hill-Rom (Baxter), KCI Medical (3M), and GE Healthcare. His extensive expertise is expected to enhance Accuray’s global operations and drive business growth, particularly as the company expands its radiation therapy system portfolio.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.