NasdaqGS:ARAY

Stock Analysis Report

Executive Summary

Accuray Incorporated designs, develops, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the body.

Rewards

Trading at 34.5% below its fair value

Earnings have grown 16.5% per year over the past 5 years

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


Similar Companies

Varian Medical Systems

NYSE:VAR

Share Price & News

How has Accuray's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARAY's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

12.6%

ARAY

2.0%

US Medical Equipment

0.8%

US Market


1 Year Return

-17.2%

ARAY

29.1%

US Medical Equipment

25.1%

US Market

Return vs Industry: ARAY underperformed the US Medical Equipment industry which returned 28.4% over the past year.

Return vs Market: ARAY underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

ARAYIndustryMarket
7 Day12.6%2.0%0.8%
30 Day32.6%4.1%3.1%
90 Day33.1%12.7%10.9%
1 Year-17.2%-17.2%30.1%29.1%27.7%25.1%
3 Year-29.6%-29.6%96.1%90.4%51.3%41.6%
5 Year-49.9%-49.9%130.3%105.7%77.2%57.6%

Price Volatility Vs. Market

How volatile is Accuray's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Accuray undervalued compared to its fair value and its price relative to the market?

24.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARAY ($3.03) is trading below our estimate of fair value ($4.62)

Significantly Below Fair Value: ARAY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ARAY is unprofitable, so we can't compare its PE Ratio to the Medical Equipment industry average.

PE vs Market: ARAY is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ARAY's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ARAY is overvalued based on its PB Ratio (6.5x) compared to the US Medical Equipment industry average (4.1x).


Next Steps

Future Growth

How is Accuray forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

78.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARAY is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ARAY is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ARAY is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ARAY's revenue (4.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ARAY's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARAY's Return on Equity is forecast to be low in 3 years time (1.1%).


Next Steps

Past Performance

How has Accuray performed over the past 5 years?

16.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARAY is currently unprofitable.

Growing Profit Margin: ARAY is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ARAY is unprofitable, but has reduced losses over the past 5 years at a rate of 16.5% per year.

Accelerating Growth: Unable to compare ARAY's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ARAY is unprofitable, making it difficult to compare its past year earnings growth to the Medical Equipment industry (31%).


Return on Equity

High ROE: ARAY has a negative Return on Equity (-40.46%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Accuray's financial position?


Financial Position Analysis

Short Term Liabilities: ARAY's short term assets ($341.2M) exceed its short term liabilities ($176.1M).

Long Term Liabilities: ARAY's short term assets ($341.2M) exceed its long term liabilities ($246.6M).


Debt to Equity History and Analysis

Debt Level: ARAY's debt to equity ratio (460%) is considered high.

Reducing Debt: ARAY's debt to equity ratio has increased from 245.4% to 460% over the past 5 years.


Balance Sheet

Inventory Level: ARAY has a high level of physical assets or inventory.

Debt Coverage by Assets: ARAY's debt is covered by short term assets (assets are 1.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ARAY has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if ARAY has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Accuray's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate ARAY's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ARAY's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ARAY's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ARAY's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ARAY's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Accuray's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Joshua Levine (61yo)

7.3yrs

Tenure

US$4,644,992

Compensation

Mr. Joshua H. Levine, also known as Josh, has been an Independent Director of Natus Medical Inc. since June 22, 2018. He has been the Chief Executive Officer and President at Accuray Incorporated since Oct ...


CEO Compensation Analysis

Compensation vs Market: Joshua's total compensation ($USD4.64M) is above average for companies of similar size in the US market ($USD1.08M).

Compensation vs Earnings: Joshua's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

4.3yrs

Average Tenure

56yo

Average Age

Experienced Management: ARAY's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

7.5yrs

Average Tenure

65.5yo

Average Age

Experienced Board: ARAY's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

Insider Buying: ARAY insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

SellUS$28,52306 Jan 20
Shigeyuki Hamamatsu
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares10,563
Max PriceUS$2.70
SellUS$1,64705 Dec 19
Jesse Chew
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares601
Max PriceUS$2.74
SellUS$48,20805 Dec 19
Joshua Levine
EntityIndividual
Role
Chief Executive Officer
President
Shares17,587
Max PriceUS$2.74
SellUS$5,25705 Dec 19
Andrew Kirkpatrick
EntityIndividual
Shares1,918
Max PriceUS$2.74
SellUS$10,81404 Nov 19
Andrew Kirkpatrick
EntityIndividual
Shares4,141
Max PriceUS$2.61
SellUS$5,52304 Nov 19
Jesse Chew
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares2,143
Max PriceUS$2.61
SellUS$73,31404 Nov 19
Joshua Levine
EntityIndividual
Role
Chief Executive Officer
President
Shares28,081
Max PriceUS$2.61
BuyUS$65,00001 Nov 19
Joseph Whitters
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,000
Max PriceUS$2.60
SellUS$24,21503 Oct 19
Shigeyuki Hamamatsu
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares8,901
Max PriceUS$2.72
SellUS$49,03203 Oct 19
Joshua Levine
EntityIndividual
Role
Chief Executive Officer
President
Shares18,023
Max PriceUS$2.72
SellUS$4,93803 Oct 19
Andrew Kirkpatrick
EntityIndividual
Shares1,815
Max PriceUS$2.72
BuyUS$32,75006 Sep 19
Joseph Whitters
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares12,500
Max PriceUS$2.62
SellUS$211,63105 Jul 19
Joshua Levine
EntityIndividual
Role
Chief Executive Officer
President
Shares56,426
Max PriceUS$3.75
SellUS$30,84005 Jul 19
Andrew Kirkpatrick
EntityIndividual
Shares8,222
Max PriceUS$3.75
SellUS$7,76103 May 19
Patrick Spine
EntityIndividual
Role
Chief Administrative Officer
Senior VP & Chief Administrative Officer
Shares1,921
Max PriceUS$4.04
SellUS$29,98203 Apr 19
Joshua Levine
EntityIndividual
Role
Chief Executive Officer
President
Shares6,604
Max PriceUS$4.54

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.9%.


Management Team

  • Joshua Levine (61yo)

    President

    • Tenure: 7.3yrs
    • Compensation: US$4.64m
  • Greg Lichtwardt (65yo)

    Consultant

    • Tenure: 4.3yrs
    • Compensation: US$419.13k
  • Suzanne Winter (56yo)

    Senior VP & Chief Commercial Officer

    • Tenure: 0.3yrs
  • Shig Hamamatsu (46yo)

    Senior VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$1.40m
  • Darl Moreland (60yo)

    Senior Vice President of Regulatory

    • Tenure: 6.4yrs
  • Patrick Spine (48yo)

    Senior VP & Chief Administrative Officer

    • Compensation: US$1.09m
  • Beth Kaplan

    Public Relations Director

    • Tenure: 5.6yrs
  • Jesse Chew (38yo)

    Senior VP

    • Scott Chapman

      Senior Vice President of Global Service

      • Tenure: 1yrs

    Board Members

    • Joe Whitters (60yo)

      Independent Director

      • Tenure: 1.5yrs
      • Compensation: US$271.20k
    • Lou Lavigne (70yo)

      Independent Chairman

      • Tenure: 9.8yrs
      • Compensation: US$240.00k
    • Joshua Levine (61yo)

      President

      • Tenure: 7.3yrs
      • Compensation: US$4.64m
    • Jim Hindman (58yo)

      Independent Director

      • Tenure: 0.3yrs
    • Liz Dávila (75yo)

      Independent Vice Chairperson

      • Tenure: 11.3yrs
      • Compensation: US$223.75k
    • Jack Goldstein (71yo)

      Independent Director

      • Tenure: 9.7yrs
      • Compensation: US$215.00k
    • Beverly Huss (59yo)

      Independent Director

      • Tenure: 2yrs
      • Compensation: US$210.00k
    • Richard Pettingill (70yo)

      Independent Director

      • Tenure: 7.7yrs
      • Compensation: US$215.00k

    Company Information

    Accuray Incorporated's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Accuray Incorporated
    • Ticker: ARAY
    • Exchange: NasdaqGS
    • Founded: 1990
    • Industry: Health Care Equipment
    • Sector: Healthcare
    • Market Cap: US$325.830m
    • Shares outstanding: 89.02m
    • Website: https://www.accuray.com

    Number of Employees


    Location

    • Accuray Incorporated
    • 1310 Chesapeake Terrace
    • Sunnyvale
    • California
    • 94089
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    ARAYNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDFeb 2007
    XEJDB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2007
    0H8ILSE (London Stock Exchange)YesCommon StockGBUSDFeb 2007

    Biography

    Accuray Incorporated designs, develops, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the body. The company offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of various types of cancer and tumors in the body. Its CyberKnife System automatically tracks, detects, and corrects for tumor and patient movement in real-time during the procedure, as well as enables the delivery of precise, high dose radiation while patients breathe normally. The company also offers the TomoTherapy System, which consists of an integrated and versatile radiation therapy system used for the treatment of a range of cancer types. It markets its products in the United States directly, as well as through sales organizations, sales agents, and group purchasing organizations; and directly, as well as through distributors and sales agents in Europe, Asia, and South America to hospitals and stand-alone treatment facilities. The company was incorporated in 1990 and is headquartered in Sunnyvale, California. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 00:48
    End of Day Share Price2020/01/21 00:00
    Earnings2019/09/30
    Annual Earnings2019/06/30


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.