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Accuray
(NASDAQ:ARAY)
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Rating:40Underperform
Price Target:
$0.23
▼(-14.44% Downside)
Action:Downgraded
Date:07/30/26
ARAY scores low primarily due to weak financial performance (margin compression, net losses, and negative operating/free cash flow) despite meaningful debt reduction. Technicals also detract, with the stock trading below all key moving averages and showing high volatility. The earnings call adds mixed signals—cost-saving execution is improving, but guidance withdrawal and ongoing revenue/margin pressure keep near-term risk elevated.
Positive Factors
Recurring service revenue / contract coverage
High service contract coverage (~90%) creates a durable recurring revenue base tied to the installed system footprint. Even if product placements fluctuate, stable service attach rates and pricing favorability support predictable cash flows, margin recovery potential, and long‑term customer stickiness.
Negative Factors
Product revenue weakness and backlog decline
Sustained product sales declines reduce new system placements and slow growth of the installed base that drives future service and consumable revenue. A falling backlog and weaker order flow lengthen recovery timelines and impair operating leverage from capital equipment sales.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring service revenue / contract coverage
High service contract coverage (~90%) creates a durable recurring revenue base tied to the installed system footprint. Even if product placements fluctuate, stable service attach rates and pricing favorability support predictable cash flows, margin recovery potential, and long‑term customer stickiness.
Read all positive factors
Accuray Key Performance Indicators (KPIs)
Any
Net Revenue by Geography
Shows where sales come from across regions (for example U.S., Europe, APAC), highlighting market strength, growth opportunities and geographic concentration risk. Dependence on a single region increases exposure to local reimbursement rules, currency swings and economic cycles, while growth in underpenetrated markets signals runway for new system installations and follow-on service revenue.
Shows where sales come from across regions (for example U.S., Europe, APAC), highlighting market strength, growth opportunities and geographic concentration risk. Dependence on a single region increases exposure to local reimbursement rules, currency swings and economic cycles, while growth in underpenetrated markets signals runway for new system installations and follow-on service revenue.
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The FlyAccuray (ARAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$32.44M
Dividend YieldN/A
Average Volume (3M)1.58M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth-12.34%
EPS Growth-2363.03%
CountryUS
Employees990
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-0.40
Shares Outstanding119,439,310
10 Day Avg. Volume1,073,205
30 Day Avg. Volume1,578,539
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.76
Price to Sales (P/S)0.08
P/FCF Ratio0.00
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-0.24
Revenue Forecast (FY)$413.00M
Accuray Business Overview & Revenue Model
Company Description
Accuray Incorporated specializes in the design, development, production, and sale of advanced radiosurgery and radiation therapy equipment aimed at treating tumors. Their market footprint spans across North and South America, Australia, New Zealan...
How the Company Makes Money
Accuray makes money primarily by selling radiation therapy capital equipment and by generating recurring revenue from services and support tied to its installed base. Key revenue streams include: (1) System revenue: one-time sales of its radiation...
Accuray Earnings Call Summary
Earnings Call Date:Aug 19, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call presented a balanced mix of encouraging operational progress and continued material challenges. Positive developments include service revenue growth, improved service margins, realization of more than $20M in transformation savings (with an expected ~$15M annualized benefit), improved Q4 adjusted EBITDA and operating income, reduced inventory and an announced financing transaction with TCW that should materially strengthen liquidity and capital structure if completed. On the negative side, the company reported significant declines in product revenue (Q4 -42% YoY; FY -27% YoY), weaker product margins when excluding tariff favorability, a FY operating loss of $26.4M, a fall in trailing book-to-bill below the company target, and ongoing geopolitical/tariff uncertainty (notably China) that materially curtailed sales visibility and led management to withhold formal FY27 revenue/EBITDA guidance. Overall, the call signals that the company has made important progress on cost, service and financing initiatives, but persistent product demand and regional/tariff headwinds remain significant near-term risks.Positive Updates
Service Revenue Growth and Strength
Q4 service revenue was $60.1M, up $3.2M or 6% YoY (5% constant currency). Full-year service revenue was $229M, up $8.3M or 4% YoY (2% constant currency). Improvements were driven by service contract pricing actions (~$1.4M in Q4; ~$5.4M FY) and an expanding installed base and higher out-of-contract billings.
Negative Updates
Significant Decline in Net Revenue
Q4 net revenue was $100.9M, down 21% YoY (reported and constant currency). Full-year revenue was $402M, down 12% YoY (down 14% constant currency). Revenue decreases were driven primarily by lower product revenue.
Read all updates
Q4-2026 Updates
Positive
Negative
Service Revenue Growth and Strength
Q4 service revenue was $60.1M, up $3.2M or 6% YoY (5% constant currency). Full-year service revenue was $229M, up $8.3M or 4% YoY (2% constant currency). Improvements were driven by service contract pricing actions (~$1.4M in Q4; ~$5.4M FY) and an expanding installed base and higher out-of-contract billings.
Read all positive updates
Company Guidance
The company did not provide formal fiscal 27 revenue or adjusted EBITDA guidance, but said it expects continued growth in service revenue and improved service margins driven by pricing optimization and operational efficiencies, ongoing operating expense discipline, and continued benefits from transformation initiatives (having realized >$20M of cost/margin improvement in FY26 versus a $12M target and expecting ~ $15M of incremental annualized cost and margin improvement in FY27, subject to demand and macro conditions). Key metrics discussed include Q4 net revenue $100.9M (down 21% YoY) and FY26 revenue $402M (down 12% / 14% constant), Q4 service revenue $60.1M (up 6%) and FY service $229M (up 4%) with a contract capture rate near 90%, Q4 product revenue $40.8M (down 42%) and FY product $173M (down 27%), Q4 gross orders ≈ $38M (book-to-bill 0.9x), FY gross orders $192M (trailing 12‑month book-to-bill 1.1x) and an order backlog of ≈ $313M (orders <30 months). Profitability and balance-sheet metrics referenced included Q4 overall gross margin 34.8% (pro forma ~30.5% after one‑time items), Q4 service gross margin 36.8% (up 10.7 pts sequential), adjusted Q4 product margin ~17.5% (ex‑tariff favorability), Q4 operating income $5.5M, Q4 adjusted EBITDA $12.9M (FY adj. EBITDA $10.6M), total cash $48.8M, net A/R $67.4M, inventory $147.1M, and $5M drawn on the revolver; they also outlined a TCW transaction that converts $40M of debt to convertible preferred equity, includes a $15M investment and up to $5M delayed draw, an 8% dividend on the preferred, a $0.50 conversion price (~105% premium at announcement), a covenant holiday through 12/31/2027 (first covenant test 3/31/2028), and a planned reverse split (ratio TBD) subject to shareholder approval.Accuray Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
46
Neutral
Cash Flow
29
Negative
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 401.95M | 458.50M | 446.55M | 447.61M | 429.91M |
| Gross Profit | 111.45M | 146.97M | 142.92M | 153.96M | 159.96M |
| EBITDA | -14.34M | 20.24M | 5.71M | 8.37M | 11.64M |
| Net Income | -49.19M | -1.59M | -15.54M | -9.28M | -5.35M |
Balance Sheet | |||||
| Total Assets | 443.68M | 470.24M | 468.63M | 479.21M | 472.85M |
| Cash, Cash Equivalents and Short-Term Investments | 41.23M | 57.42M | 68.57M | 89.40M | 88.74M |
| Total Debt | 183.87M | 176.38M | 210.75M | 205.04M | 199.49M |
| Total Liabilities | 401.98M | 389.07M | 423.54M | 425.56M | 419.66M |
| Stockholders Equity | 41.70M | 81.17M | 45.08M | 53.66M | 53.19M |
Cash Flow | |||||
| Free Cash Flow | 0.00 | -5.66M | -15.51M | 2.86M | -7.12M |
| Operating Cash Flow | 0.00 | 2.86M | -11.90M | 15.54M | -2.40M |
| Investing Cash Flow | 0.00 | -8.52M | -3.60M | -12.68M | -4.72M |
| Financing Cash Flow | 0.00 | -4.25M | -3.95M | -2.11M | -15.37M |
Accuray Technical Analysis
Negative
0.27
Price Trends
0.28
Negative
0.33
Negative
0.55
Negative
Market Momentum
<0.01
Positive
46.62
Neutral
13.78
Positive
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 0.27 is below the 20-day moving average (MA) of 0.28, below the 50-day MA of 0.28, and below the 200-day MA of 0.55, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.62 is Neutral, neither overbought nor oversold. The STOCH value of 13.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARAY.
Accuray Risk Analysis
Accuray disclosed 50 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $333.60M | 33.02 | 23.38% | ― | 16.79% | 45.17% | |
65 Neutral | $113.40M | 7.27 | 9999.00% | ― | 3.26% | ― | |
55 Neutral | $314.65M | -3.93 | 273.71% | ― | 25.25% | -9.85% | |
54 Neutral | $145.96M | -6.16 | -13.17% | ― | 3.15% | 14.61% | |
54 Neutral | $857.63M | -3.19 | -77.66% | ― | -9.56% | 16.73% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
40 Underperform | $32.44M | -0.69 | -99.04% | ― | -12.34% | -2363.03% |
* Healthcare Sector Average
ARAY
Accuray
0.26
-1.31
-83.18%
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TLSI
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4.93
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AVR
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8.95
5.29
144.54%
Accuray Corporate Events
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and FinancingStock Split
Accuray Restructures Capital and Governance to Boost Flexibility
Positive
Jul 29, 2026
On July 29, 2026, Accuray executed a series of agreements with primary lender and major shareholder TCW Asset Management to strengthen its balance sheet and governance. The company will issue $55 million of Series A convertible preferred stock, fu...
Business Operations and StrategyPrivate Placements and Financing
Accuray Retires 2026 Convertible Notes, Simplifies Capital Structure
Positive
Jun 4, 2026
On June 1, 2026, Accuray repaid in full the remaining outstanding principal of its 3.75% Convertible Senior Notes due 2026, together with accrued and unpaid interest, and retired the securities in accordance with their original terms. The maturity...
Business Operations and StrategyFinancial Disclosures
Accuray Posts Weaker Q3 Results, Withdraws 2026 Guidance
Negative
May 6, 2026
Accuray reported fiscal third-quarter 2026 results on May 6, 2026, showing total net revenue of $104.8 million, down 7% year-on-year, with product revenue falling 13% and service revenue slipping 1%, while gross margin compressed to 24.1% on highe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.