It has been a long time since Accuray (ARAY)
has shown any sustained momentum in the business, and it looks like the
market is largely out of patience. Although the company hit an all-time
high for quarterly revenue, it still can’t reliably hit the
$100M/quarter order target I believe it needs to reach to achieve any
real momentum in the business, and the share price is at an all-time
low.
Does a record high quarterly revenue figure and
a record low share price mean that there is a fundamental disconnect
between the market and the company? There are a lot of good things I can
say about this management team, but they haven’t been able to change
the underlying competitive dynamic much (Varian (VAR) has only gotten stronger) and pretty much all of the company’s eggs are now in the “China will change things” basket.
I
don’t believe Accuray’s China business will drive a fundamental shift
in the business and I disagree that Accuray has particularly attractive
prospects as a buyout candidate. Although I do think the shares should
trade in the mid-single digits, and that’s considerably higher than
today’s price on a percentage basis, this is a speculative call at this
point.
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Accuray's 'Wait 'Til Next Year' Story Wearing Thin
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