Accuray Results Weren't Bad, But There's Still No Growth

Accuray (NASDAQ:ARAY) has put another quarter in the books, and nothing has really changed for the better. There are understandable explanations (or excuses) for the ongoing underwhelming performance, including supply issues and COVID disruptions in China, but the reality is that there has always been some “short-term issue” here to explain away weak performance, but the performance has never improved on a sustained basis.

That’s a grim opening, but with the shares down another 30% since my last update, it’s hard to have a rosy outlook here. It’s not so much that I’ve turned bearish, but there’s only so many times you can talk about progress and potential in the underlying business in the absence of real underlying evidence of progress in the financials. I’ve said in the past that Accuray needs quarterly orders around $100M to really make a go of it, and the company hasn’t been there since the summer of 2021 (and has never achieved it two quarters in a row, I believe).

Is there upside here if management can execute on opportunities in China and Japan? Yes. But that upside has to be weighed against the risk/likelihood that this company continues to drift until it runs out of cash and that any future acquisition is at a fire-sale price.

 

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Accuray Results Weren't Bad, But There's Still No Growth