Monday, May 30, 2016

Seeking Alpha: Accuray Still Stuck In Med-Tech's Twilight Zone

What do you do with a company that isn't growing anywhere near fast enough to be a growth stock, doesn't have the margins or cash flow to be a value stock, but has enough innovation and market potential to still be a disruptive factor in the industry? Unfortunately for Accuray's (NASDAQ:ARAY) shareholders, while the company has definitely been making progress, the pace of that progress keeps it stuck in an underwhelming valuation range, and there are still considerable doubts about whether it can take the sizable step forward it needs to be a long-term viable third player in its market.

I continue to approach Accuray with what I consider to be optimistic skepticism. I think the company has good technology and has really been focusing on addressing the past and current deficiencies of its systems. That said, this is a slow-growing market with a huge entrenched competitor and it is far from clear whether Accuray can establish a big enough market share footprint to drive the margins it needs to create long-term shareholder value. I think a fair value around $7.50 to $8.50 is fair today, with underlying upside if the company can demonstrate its ability to get and hold a double-digit market share before 2020.

Continue here:
Accuray Still Stuck In Med-Tech's Twilight Zone

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