Roth/MKM initiated coverage on Accuray (NASDAQ:) Incorporated (NASDAQ: ARAY) on Tuesday, giving the stock a Buy rating with a price target set at $9.00. The firm highlighted that Accuray’s current 10% market share in the radiation oncology sector and stable cash generation are positive indicators of the company’s financial health.
Accuray’s strategic move to enter the budget segment with the launch of Tomo C in China and Helix in India is expected to strengthen its position in emerging markets. First installations of Tomo C are scheduled for June in fiscal fourth quarter 2024, and Helix in fiscal 2025.
The firm expects Accuray’s entry into these new markets to accelerate the company’s revenue growth from the current low to mid single digits to at least mid to high single digits. The Roth/MKM analyst believes this growth trajectory, coupled with the company’s ability to compete more effectively in these high-growth regions, should attract investor interest and justify a higher stock valuation.
The positive outlook for Accuray’s market share and revenue growth potential in China and India reflects the company’s strategic efforts to expand into higher growth markets. The firm’s assessment suggests that these initiatives could have a material impact on Accuray’s financial performance in the coming years.
InvestingAbout Insights
As Accuray Incorporated (NASDAQ: ARAY) gains attention for its strategic moves in emerging markets, InvestingPro’s real-time data provides additional insight into the company’s financial performance and market valuation. With a market capitalization of $278.66 million, Accuray’s presence in the radiation oncology sector is notable, especially as it enters the low-cost segment with new products such as Tomo C and Helix.
The company’s expansion into new markets coincides with significant gains over the past week, as evidenced by its overall weekly return of 8.91%. This increase in investor interest may reflect optimism about the company’s expansion plans. Additionally, Accuray’s revenue growth over the last twelve months was 7.2%, highlighting the company’s potential to accelerate financial growth in line with its expanding market share.
However, investors should be aware of some problems. Analysts recently revised their earnings expectations downward for the coming period and don’t expect the company to be profitable this year, according to InvestingPro Tips. Accuray’s current price-to-book ratio, last recorded at 5.85, suggests the stock is trading at a high valuation multiple relative to its book value. Notably, the company was not profitable over the last twelve months, with an adjusted P/E ratio of -19.16.
For those who want to dig deeper into Accuray’s financials and market performance, InvestingPro offers additional tips for making investment decisions. Interested readers can find additional analysis and metrics on Accuray’s dedicated InvestingPro page: https://www.investing.com/pro/ARAY. Additionally, for a more complete experience, readers can use a coupon code. PRONEWS24 to receive an additional 10% discount on annual or biennial Pro and Pro+ subscriptions, giving you access to a variety of investment information. With 6 more InvestingPro tips, investors can gain a more detailed understanding of Accuray’s market position and future prospects.
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