Friday, November 8, 2013

Seeking Alpha: Accuray's Orders Continue To Stoke Optimism

Things are definitely not perfect for Accuray (ARAY) yet, but the story continues to improve on a quarter by quarter basis. Assuming that the company can successfully convert orders to installations and revenue, the company is gaining share from Varian (VAR) and Elekta (EKTAY) and rebuilding credibility that this can once again become a med-tech growth story.

Many things can still go wrong, as the company's order level is still below where it needs to be to be a viable business and the long-term margin structure is a significant unknown. This is also still a volatile stock, as investors have seen these shares trade down recently on worries about reimbursement in the radiation oncology market. These shares are up slightly since my last update, but still up more than 60% from the midyear lows. My base-case scenario estimates see these shares about 20% undervalued today, but total upside in the bullish scenario could still be on the order of 50%.

Please read more:
Accuray's Orders Continue To Stoke Optimism

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