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Here's Why You Should Hold Accuray Stock in Your Portfolio for Now
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Key Takeaways
ARAY posted strong Q4 order momentum with $85M in gross orders and a 1.2x book-to-bill ratio.
ARAY saw APAC orders surge 50% and Japan rise 34%, while China and EIMEA grew double digits.
ARAY's CyberKnife S7 system demand remains strong, driving momentum for future growth.
Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued product order momentum. The optimism, led by decent performance in the emerging markets in the fourth quarter of fiscal 2025 and potential in the Radiosurgery Market, is expected to contribute further. However, issues regarding soft product demand persist.
This Zacks Rank #3 (Hold) company has lost 19.2% in the year-to-date period compared with the 11% decline in the industry. The S&P 500 has witnessed 13.4% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $181.4 million. Accuray predicts 100% earnings growth for fiscal 2025 and anticipates maintaining its strong performance going forward. The company has a P/S ratio of 0.4X compared with the industry’s 2.5X.
Image Source: Zacks Investment Research
Reasons Favoring Accuray’s Growth
Healthy Product Order Momentum Underpins Growth Visibility: Accuray’s fiscal fourth-quarter 2025 underscored strong order momentum, with gross orders of approximately $85 million and a healthy 1.2x book-to-bill ratio. APAC surged 50% and Japan grew 34%, while China and EIMEA posted double-digit gains despite shipment headwinds. Although U.S. demand was soft, management expects replacement activity to improve given an aging installed base. With a backlog of approximately $427 million providing more than 18 months of revenue visibility, Accuray enters fiscal 2026 well-positioned for sustained growth and order conversion.
Strength in CyberKnife System: Accuray’s CyberKnife System, a robotic radiosurgery platform with more than 20 years of clinical backing, is designed to treat tumors throughout the body, especially in the head, skull base and spine. The system’s high precision, enabled by Synchrony real-time tumor tracking and ClearRT imaging, makes it ideal for treating cancers, benign growths and functional disorders. A recent study in the International Journal of Cancer validated its clinical strength, highlighting efficacy in treating brain stem metastases.
During the fiscal fourth quarter, management reiterated the strong momentum of the CyberKnife S7 system, highlighting its unique position as the only robotic platform dedicated to delivering SRS and SBRT treatments. They noted that demand for the system remains healthy, with encouraging traction across markets, though in China, the pace of installations is tied to government funding timelines for awarded licenses. Even with this cautious near-term backdrop, the company sees the CyberKnife franchise as a core growth driver, with the S7’s advanced capabilities and differentiated clinical profile positioning it well to capture upgrade opportunities in developed markets and expand patient access globally.
Decent Q4 Results: Accuray’s fourth-quarter fiscal 2025 results highlighted resilient performance despite regional challenges, with revenues exceeding estimates. Growth was driven by a 22% sales surge in APAC and a 24% rebound in the Americas, supported by strong backlog conversions. Service revenue rose 4% on the back of an expanding installed base and higher contract capture rates, while momentum for Tomo C in China and Helix internationally added further traction. A healthy book-to-bill ratio of 1.2 and robust order growth, up 50% in APAC, 34% in Japan and double digits in China and EIMEA, underscore sustained global demand and solid long-term positioning.
A Factor That May Offset the Gains for ARAY
Soft Product Performance Amid Regional Headwinds: Accuray’s fiscal fourth-quarter 2025 results revealed weakness in product performance, with revenues declining 11% year over year to $71 million, reflecting the impact of tariffs in China, geopolitical unrest in EIMEA and softer demand in Japan. Product sales in China fell 14%, EIMEA was down 34% and Japan contracted 11%, highlighting vulnerability to macro and regional disruptions. Management acknowledged that the shift in regional revenue mix also led to a deferral of $1.7 million in higher-margin sales into future quarters, pressuring near-term profitability. The quarter underscored the volatility in Accuray’s product business, where exposure to trade dynamics and geopolitical risks remains a headwind, raising questions about the company’s ability to deliver consistent growth from its capital equipment sales.
ARAY’s Estimate Trend
Accuray has been witnessing a stable estimate revision trend for fiscal 2025. Over the past 30 days, the Zacks Consensus Estimate for earnings has remained stable at breakeven for FY25.
The consensus estimate for first-quarter fiscal 2026 revenues is pegged at $94 million, indicating a 7.4% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Envista (NVST - Free Report) .
West Pharmaceutical reported second-quarter 2025 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the consensus estimate by 5.4%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Medpace Holdings, sporting a Zacks Rank of 1, reported second-quarter 2025 EPS of $3.10, which beat the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
Envista reported second-quarter 2025 adjusted EPS of 26 cents, which beat the Zacks Consensus Estimate by 8.3%. Revenues of $682 million surpassed the Zacks Consensus Estimate by 6.3%. It currently carries a Zacks Rank #2 (Buy).
Envista has a long-term estimated growth rate of 16.8%. NVST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.50%.
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Here's Why You Should Hold Accuray Stock in Your Portfolio for Now
Key Takeaways
Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued product order momentum. The optimism, led by decent performance in the emerging markets in the fourth quarter of fiscal 2025 and potential in the Radiosurgery Market, is expected to contribute further. However, issues regarding soft product demand persist.
This Zacks Rank #3 (Hold) company has lost 19.2% in the year-to-date period compared with the 11% decline in the industry. The S&P 500 has witnessed 13.4% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $181.4 million. Accuray predicts 100% earnings growth for fiscal 2025 and anticipates maintaining its strong performance going forward. The company has a P/S ratio of 0.4X compared with the industry’s 2.5X.
Image Source: Zacks Investment Research
Reasons Favoring Accuray’s Growth
Healthy Product Order Momentum Underpins Growth Visibility: Accuray’s fiscal fourth-quarter 2025 underscored strong order momentum, with gross orders of approximately $85 million and a healthy 1.2x book-to-bill ratio. APAC surged 50% and Japan grew 34%, while China and EIMEA posted double-digit gains despite shipment headwinds. Although U.S. demand was soft, management expects replacement activity to improve given an aging installed base. With a backlog of approximately $427 million providing more than 18 months of revenue visibility, Accuray enters fiscal 2026 well-positioned for sustained growth and order conversion.
Strength in CyberKnife System: Accuray’s CyberKnife System, a robotic radiosurgery platform with more than 20 years of clinical backing, is designed to treat tumors throughout the body, especially in the head, skull base and spine. The system’s high precision, enabled by Synchrony real-time tumor tracking and ClearRT imaging, makes it ideal for treating cancers, benign growths and functional disorders. A recent study in the International Journal of Cancer validated its clinical strength, highlighting efficacy in treating brain stem metastases.
During the fiscal fourth quarter, management reiterated the strong momentum of the CyberKnife S7 system, highlighting its unique position as the only robotic platform dedicated to delivering SRS and SBRT treatments. They noted that demand for the system remains healthy, with encouraging traction across markets, though in China, the pace of installations is tied to government funding timelines for awarded licenses. Even with this cautious near-term backdrop, the company sees the CyberKnife franchise as a core growth driver, with the S7’s advanced capabilities and differentiated clinical profile positioning it well to capture upgrade opportunities in developed markets and expand patient access globally.
Decent Q4 Results: Accuray’s fourth-quarter fiscal 2025 results highlighted resilient performance despite regional challenges, with revenues exceeding estimates. Growth was driven by a 22% sales surge in APAC and a 24% rebound in the Americas, supported by strong backlog conversions. Service revenue rose 4% on the back of an expanding installed base and higher contract capture rates, while momentum for Tomo C in China and Helix internationally added further traction. A healthy book-to-bill ratio of 1.2 and robust order growth, up 50% in APAC, 34% in Japan and double digits in China and EIMEA, underscore sustained global demand and solid long-term positioning.
A Factor That May Offset the Gains for ARAY
Soft Product Performance Amid Regional Headwinds: Accuray’s fiscal fourth-quarter 2025 results revealed weakness in product performance, with revenues declining 11% year over year to $71 million, reflecting the impact of tariffs in China, geopolitical unrest in EIMEA and softer demand in Japan. Product sales in China fell 14%, EIMEA was down 34% and Japan contracted 11%, highlighting vulnerability to macro and regional disruptions. Management acknowledged that the shift in regional revenue mix also led to a deferral of $1.7 million in higher-margin sales into future quarters, pressuring near-term profitability. The quarter underscored the volatility in Accuray’s product business, where exposure to trade dynamics and geopolitical risks remains a headwind, raising questions about the company’s ability to deliver consistent growth from its capital equipment sales.
ARAY’s Estimate Trend
Accuray has been witnessing a stable estimate revision trend for fiscal 2025. Over the past 30 days, the Zacks Consensus Estimate for earnings has remained stable at breakeven for FY25.
The consensus estimate for first-quarter fiscal 2026 revenues is pegged at $94 million, indicating a 7.4% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Envista (NVST - Free Report) .
West Pharmaceutical reported second-quarter 2025 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the consensus estimate by 5.4%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Medpace Holdings, sporting a Zacks Rank of 1, reported second-quarter 2025 EPS of $3.10, which beat the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
Envista reported second-quarter 2025 adjusted EPS of 26 cents, which beat the Zacks Consensus Estimate by 8.3%. Revenues of $682 million surpassed the Zacks Consensus Estimate by 6.3%. It currently carries a Zacks Rank #2 (Buy).
Envista has a long-term estimated growth rate of 16.8%. NVST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.50%.