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Accuray
(NASDAQ:ARAY)
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Rating:40Underperform
Price Target:
$0.23
▼(-3.75% 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
$31.89M
Dividend YieldN/A
Average Volume (3M)1.58M
Price to Earnings (P/E)―
Beta (1Y)1.98
Revenue Growth-7.88%
EPS Growth-5535.71%
CountryUS
Employees990
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-0.37
Shares Outstanding118,963,700
10 Day Avg. Volume1,073,205
30 Day Avg. Volume1,578,539
Financial Highlights & Ratios
PEG Ratio0.98
Price to Book (P/B)1.73
Price to Sales (P/S)0.31
P/FCF Ratio-24.86
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 Target
$0.35Price Target Upside45.83% Upside
Rating ConsensusHold
Number of Analyst Covering1
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:May 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Neutral
The call presents a balanced mix of positive operational progress and concerning near-term challenges. Positives include tangible early wins from the transformation program (approximately $10 million realized vs a $12 million FY2026 target), disciplined cost actions, product order momentum (book-to-bill ~1.0, 12-month 1.2), strategic hires and partnerships, and initiatives to monetize the installed base. Negatives include year-over-year revenue declines driven largely by product weakness (-13% YoY), significant margin compression (overall gross margin down ~380 basis points YoY with larger service margin deterioration), an operating loss for the quarter, tariff and parts-related cost pressure, geopolitical disruptions in the Middle East and continued China uncertainty, and the withdrawal of financial guidance. Taken together, the fundamentals show promising structural improvements and strategic clarity, but near-term top-line pressure, margin headwinds, and external uncertainty sustain material execution and visibility risk.Positive Updates
Total Revenue and Sequential Growth
Total revenue of $104.8 million in Q3 FY2026, up 3% sequentially but down 7% year-over-year (down 10% on a constant currency basis).
Negative Updates
Year-Over-Year Revenue Decline and Product Weakness
Total revenue declined 7% year-over-year. Product revenue was $49.7 million, down 13% versus the prior year (down 15% on a constant currency basis), representing the majority of the YoY decline.
Read all updates
Q3-2026 Updates
Positive
Negative
Total Revenue and Sequential Growth
Total revenue of $104.8 million in Q3 FY2026, up 3% sequentially but down 7% year-over-year (down 10% on a constant currency basis).
Read all positive updates
Company Guidance
Accuray withdrew financial guidance for the time being due to unpredictable geopolitical disruption in the Middle East, North Africa, Pakistan and ongoing China headwinds and said it will provide an update with fiscal Q4 results; in Q3 (ended 3/31/26) net revenue was $104.8M (≈$105M), down 7% YoY and down 10% on a constant‑currency basis but up 3% sequentially, with product revenue $49.7M (−13% YoY, −15% CC) and service revenue $55.1M (−1% YoY, −5% CC) including a $1.2M negative Middle East impact, ~90% contract capture rate, and $0.6M of service price favorability; product gross orders were ~$49M with a book‑to‑bill of 1.0 (TTM 1.2) and a backlog of ≈$356M (<30 months); overall gross margin was 24.1% (vs. 27.9% LY) with service margin 26.1% (vs. 33.3% LY) hurt by $3.2M extra parts use (~600 bps) and $0.8M of tariff impact (~150 bps), product margin 21.9% (vs. 22.7% LY) with ~$2.6M tariff cost (~530 bps); operating expenses were $34.4M (includes $6.5M nonrecurring restructuring), adjusted operating expenses fell ~$6M (−18%) YoY excluding discrete items, Q3 operating loss was $9.1M (prior year income $1.0M), adjusted EBITDA was $3.8M (vs. $6.0M LY), cash and restricted cash totaled $44.4M (down from $47.9M), restricted cash $0.4M (vs. $6.6M), net A/R $64.6M (+$3.6M QoQ), inventory $156.6M (+$5.7M QoQ), $5M drawn on the revolver, and the company has implemented ~15% workforce reductions as part of a transformation plan targeting roughly $25M of structural operating profitability improvements annually (about $12M expected to benefit FY2026, ~ $10M realized through Q3) with a goal to realize the bulk by FY2027.Accuray Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
46
Neutral
Cash Flow
29
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 428.57M | 458.50M | 446.55M | 447.61M | 429.91M | 396.29M |
| Gross Profit | 114.89M | 146.97M | 142.92M | 153.96M | 159.96M | 159.51M |
| EBITDA | -6.52M | 20.24M | 5.71M | 8.37M | 11.64M | 18.72M |
| Net Income | -46.13M | -1.59M | -15.54M | -9.28M | -5.35M | -6.31M |
Balance Sheet | ||||||
| Total Assets | 447.60M | 470.24M | 468.63M | 479.21M | 472.85M | 480.10M |
| Cash, Cash Equivalents and Short-Term Investments | 38.07M | 57.42M | 68.57M | 89.40M | 88.74M | 116.37M |
| Total Debt | 182.40M | 176.38M | 210.75M | 205.04M | 199.49M | 199.41M |
| Total Liabilities | 405.89M | 389.07M | 423.54M | 425.56M | 419.66M | 411.26M |
| Stockholders Equity | 41.71M | 81.17M | 45.08M | 53.66M | 53.19M | 68.84M |
Cash Flow | ||||||
| Free Cash Flow | -28.95M | -5.66M | -15.51M | 2.86M | -7.12M | 36.19M |
| Operating Cash Flow | -19.12M | 2.86M | -11.90M | 15.54M | -2.40M | 38.51M |
| Investing Cash Flow | -14.33M | -8.52M | -3.60M | -12.68M | -4.72M | -2.40M |
| Financing Cash Flow | -2.49M | -4.25M | -3.95M | -2.11M | -15.37M | -28.80M |
Accuray Technical Analysis
Neutral
0.24
Price Trends
0.30
Negative
0.35
Negative
0.65
Negative
Market Momentum
-0.01
Negative
50.89
Neutral
66.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARAY, the sentiment is Neutral. The current price of 0.24 is below the 20-day moving average (MA) of 0.25, below the 50-day MA of 0.30, and below the 200-day MA of 0.65, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 50.89 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $337.25M | 33.39 | 22.14% | ― | 16.79% | 45.17% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $174.63M | -7.09 | -12.90% | ― | 3.39% | 19.78% | |
49 Neutral | $60.64M | 5.11 | -514.92% | ― | 1.12% | ― | |
49 Neutral | $278.83M | -3.22 | 162.57% | ― | 39.64% | -25.99% | |
43 Neutral | $763.16M | -1.96 | -124.39% | ― | -25.74% | 2.38% | |
40 Underperform | $31.89M | -0.73 | -77.48% | ― | -7.88% | -5535.71% |
* Healthcare Sector Average
ARAY
Accuray
0.31
-0.99
-76.08%
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TLSI
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4.74
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AVR
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8.28
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117.89%
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.