Expectations are so low the surprise should be to the upside.
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RECOMMENDATION
We rate ACCURAY INC (ARAY) a SELL. This is driven by several weaknesses, which we believe should have a
greater impact than any strengths, and could make it more difficult for investors to achieve positive results
compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important
has been a generally disappointing historical performance in the stock itself.
HIGHLIGHTS
ARAY's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the
net result is that it is down by 67.22%, which is also worse that the performance of the S&P 500 Index.
Investors have so far failed to pay much attention to the earnings improvements the company has managed
to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive
(when compared to its current earnings) than most other companies in its industry.
44.70% is the gross profit margin for ACCURAY INC which we consider to be strong. Despite the high profit
margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross
profit margin, ARAY's net profit margin of 1.00% is significantly lower than the same period one year prior.
In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall
market, ACCURAY INC's return on equity is significantly below that of the industry average and is below that
of the S&P 500.
ARAY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a
relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate
quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
ACCURAY INC reported significant earnings per share improvement in the most recent quarter compared to
the same quarter a year ago. This year, the market expects an improvement in earnings ($0.13 versus -$0.01).
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