I don't typically like to talk about companies in "make or break" terms, but the next four quarters may be Accuray's (NASDAQ:ARAY)
last, best hope for establishing itself as a legitimate growth story in
radiation oncology. The company now has a fully-fledged product line-up
and the marketing resources to get its name in front of radonc centers.
Factoring in a (relatively) new trade-in program and the prospect for
significant system renewals, the company really needs to hit its mark
with quarterly orders to make a compelling case that it is a viable
third player against Varian (NYSE:VAR) and Elekta (OTCPK:EKTAY).
Moving
the model out a year boosts my DCF-based fair value estimate a bit
above $9 while my revenue-based fair value stays around $12. That's
meaningful undervaluation, but this is a company with an uninspiring
record when it comes to disrupting the market and generating consistent
order growth. I do believe that Accuray now offers reliable, capable,
and differentiated systems that are appropriate for both multi-vault
academic centers and smaller single/dual-vault community hospitals, but
the next twelve months are a key proving ground for the company's sales
effort and marketing message.
Read more here:
The Next 12 Quarters Should Say A Lot About Accuray
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