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Accuray Incorporated (ARAY)
NASDAQ:ARAY

Accuray (ARAY) AI Stock Analysis

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Accuray

(NASDAQ:ARAY)

Rating:61Neutral
Price Target:
$1.50
▲(10.29%Upside)
Accuray's overall score is driven by its strong earnings performance and improved cash flow, despite high leverage and valuation concerns. Technical indicators show a bearish trend, but recent corporate events provide strategic flexibility.
Positive Factors
Debt Management
The refinancing agreement addresses investor concerns about near-term debt maturity while preserving a healthy balance sheet.
Financial Performance
Accuray reported solid 2Q results which were better than forecast and consensus, showing clear progress with strategic priorities.
Revenue Growth
China and APAC regions are driving revenue growth significantly for Accuray Incorporated.
Negative Factors
Market Uncertainty
The outlook on tariffs remains highly volatile and dynamic.
Pricing Target
The price target has been trimmed from $5 to $4.
Regional Challenges
The company faces challenges in the US and EIMEA regions, with revenue declines in these areas.

Accuray (ARAY) vs. SPDR S&P 500 ETF (SPY)

Accuray Business Overview & Revenue Model

Company DescriptionAccuray Incorporated designs, develops, manufactures, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the United States, Canada, Latin America, Australia, New Zealand, Europe, the Middle East, India, Africa, Japan, China, and rest of the Asia Pacific region. It offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of primary and metastatic tumors outside the brain, including tumors on or near the spine and in the breast, kidney, liver, lung, pancreas, and prostate. The company also provides the TomoTherapy System, including the Radixact System, which allows for integrated radiation treatment planning, delivery, and data management, enabling clinicians to deliver ultra-precise treatments to approximately 50 patients per day; iDMS data management system, a fully integrated treatment planning and data management systems; and Accuray precision treatment planning system, a treatment planning and data management systems. In addition, it offers post-contract customer support, installation, training, and other professional services. The company primarily markets its products directly to customers, including hospitals and stand-alone treatment facilities through its sales organization, as well as to customers through sales agents and group purchasing organizations in the United States; and to customers directly and through distributors and sales agents internationally. Accuray Incorporated was incorporated in 1990 and is headquartered in Madison, Wisconsin.
How the Company Makes MoneyAccuray generates revenue primarily through the sale of its specialized radiation therapy systems and related services. The company's key revenue streams include the sale of new systems, servicing and maintaining installed systems, and providing software upgrades and support. Accuray also earns revenue from extended warranty contracts and leasing agreements. Significant partnerships with hospitals, cancer treatment centers, and healthcare providers contribute to its financial performance by expanding its market reach and customer base. Additionally, Accuray benefits from ongoing investments in research and development, which enhance its product offerings and competitive position in the oncology treatment market.

Accuray Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q3-2025)
|
% Change Since: -12.26%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company performing well against operational and financial metrics, with strong revenue growth and service business performance. However, challenges due to tariffs affecting the China market and global trade uncertainties present significant concerns.
Q3-2025 Updates
Positive Updates
Solid Revenue Growth
Revenue for the third quarter grew by 12% year-over-year, driven by strong performances in both developed and emerging markets.
Strong Service Business Performance
The service business represented approximately 49% of revenue and 59% of gross margin, with service revenue growing by 9% year-over-year.
Improved Adjusted EBITDA
Adjusted EBITDA was $6 million compared to $1.1 million a year ago, driven by volume, pricing, and operational improvements.
Efficient Operational Management
The company generated $16 million of free cash flow and reduced overall inventory levels.
Healthy Customer Demand
Book-to-bill ratio was over 1.2x, driven by new customer expansion and replacement of aged equipment.
Negative Updates
Impact of Tariffs on China Market
New tariffs are expected to decrease near-term volume of product sales in China, with an estimated impact of $10 million to $15 million in Q4 revenue.
Uncertainty Due to Global Trade Policies
Visibility on near-term growth in revenues and earnings is lower due to changes in global trade policies and tariffs.
Lower Product Margins
Overall gross margin for the quarter decreased to 27.9% from 28.7% in the prior year, mainly due to incremental net China margin deferral.
Company Guidance
During Accuray's third-quarter fiscal 2025 earnings call, the company reported a 12% year-over-year revenue growth, reaching $113 million, driven by strong performances in both developed and emerging markets. Product revenues increased by 16%, while service revenues rose by 9%. Adjusted EBITDA significantly improved to $6 million from $1.1 million the prior year, primarily due to higher shipments and operational enhancements. Accuray's service business accounted for about 49% of revenue and 59% of gross margin. The company achieved a book-to-bill ratio of 1.2x, indicating robust demand with new customer expansions and equipment replacements. Despite tariff challenges affecting China, the company anticipates Q4 revenues between $121 million and $129 million and adjusted EBITDA from $9.5 million to $12 million, maintaining full-year adjusted EBITDA guidance of $28.5 million to $31 million.

Accuray Financial Statement Overview

Summary
Accuray presents a mixed financial picture with moderate revenue growth and stable gross profit margins. High leverage and low profitability are concerns, but improved cash flow metrics offer some optimism. The company needs to focus on enhancing operational efficiency and reducing financial risk to strengthen its financial position.
Income Statement
65
Positive
Accuray's income statement shows a moderate performance with a gross profit margin of 31.5% and a net profit margin of 0.1% for TTM. The company has seen a revenue growth rate of 4.2% from the previous year, indicating a positive trend. EBIT and EBITDA margins are relatively low at 2.2% and 3.9%, respectively, pointing to limited profitability at the operating level.
Balance Sheet
58
Neutral
The balance sheet reveals a debt-to-equity ratio of 4.32, which indicates high leverage and potential financial risk. The return on equity is low at 1.4% for TTM, suggesting limited returns for shareholders. However, the equity ratio stands at 10.2%, showing a reasonable level of equity compared to total assets.
Cash Flow
72
Positive
Accuray's cash flow statement highlights a strong improvement with a positive free cash flow growth rate. The operating cash flow to net income ratio is 33.4, demonstrating robust cash generation relative to net income. Additionally, the free cash flow to net income ratio stands at 28.3, indicating efficient cash management.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue465.25M446.55M447.61M429.91M396.29M382.93M
Gross Profit146.44M142.92M153.96M159.96M159.51M149.87M
EBITDA18.09M5.71M9.61M13.66M28.62M20.08M
Net Income673.00K-15.54M-9.28M-5.35M-6.31M3.83M
Balance Sheet
Total Assets484.29M468.63M479.21M472.85M480.10M490.08M
Cash, Cash Equivalents and Short-Term Investments77.82M68.57M89.40M88.74M116.37M107.58M
Total Debt214.37M210.75M205.04M213.73M199.41M221.70M
Total Liabilities434.71M423.54M425.56M419.66M411.26M427.29M
Stockholders Equity49.58M45.08M53.66M53.19M68.84M62.79M
Cash Flow
Free Cash Flow19.03M-15.51M2.86M-7.12M36.19M-5.20M
Operating Cash Flow22.45M-11.90M15.54M-2.40M38.51M-1.47M
Investing Cash Flow-5.59M-3.60M-12.68M-4.72M-2.40M-3.73M
Financing Cash Flow899.00K-3.95M-2.11M-15.37M-28.80M26.70M

Accuray Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.36
Price Trends
50DMA
1.43
Negative
100DMA
1.61
Negative
200DMA
1.80
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
47.78
Neutral
STOCH
59.69
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 1.36 is above the 20-day moving average (MA) of 1.32, below the 50-day MA of 1.43, and below the 200-day MA of 1.80, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 47.78 is Neutral, neither overbought nor oversold. The STOCH value of 59.69 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 (46)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$146.28M238.981.48%8.06%
61
Neutral
$654.70M-61.35%10.10%-7.25%
59
Neutral
$247.27M-60.75%4.66%11.33%
57
Neutral
$181.47M-76.01%25.62%11.86%
55
Neutral
$127.70M-24.73%-1.02%-8.59%
48
Neutral
$157.38M-304.05%28.24%-334.39%
46
Neutral
C$203.97M-3.15-23.14%2.72%21.17%-0.61%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARAY
Accuray
1.36
-0.56
-29.17%
TNGX
Tango Therapeutics
5.93
-4.09
-40.82%
LNSR
LENSAR
13.03
7.88
153.01%
SEER
Seer
2.11
0.28
15.30%
CVRX
CVRx
6.83
-2.84
-29.37%
SOPH
SOPHiA GENETICS
3.49
-1.11
-24.13%

Accuray Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Accuray Enters Exchange Agreements and Secures New Credit
Positive
Jun 6, 2025

On June 5, 2025, Accuray Incorporated entered into exchange agreements with holders of its 3.75% Convertible Senior Notes due 2026, exchanging $82 million in notes for shares and cash, with the transaction expected to close on June 11, 2025. Additionally, Accuray secured a new senior secured credit agreement with TCW Asset Management, providing $150 million in term loans and additional facilities to refinance existing debt and support future operations, enhancing liquidity and operational flexibility.

The most recent analyst rating on (ARAY) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on Accuray stock, see the ARAY Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Accuray Reports Strong Q3 2025 Financial Performance
Positive
Apr 30, 2025

Accuray reported a strong financial performance for the third quarter of fiscal 2025, with a 12% increase in total net revenue to $113.2 million and a significant reduction in net loss compared to the previous year. Despite a decrease in gross product orders and a lower order backlog, the company maintained a positive outlook, reaffirming its adjusted EBITDA guidance and adjusting revenue expectations due to tariff impacts, demonstrating resilience and strategic execution in challenging global conditions.

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.Date of analysis: Jul 09, 2025