Critical Contrast: Veracyte (NASDAQ:VCYT) vs. Accuray (NASDAQ:ARAY)

Veracyte (NASDAQ:VCYT) and Accuray (NASDAQ:ARAY) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Insider and Institutional Ownership

64.1% of Accuray shares are owned by institutional investors. 1.4% of Veracyte shares are owned by insiders. Comparatively, 4.4% of Accuray shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Veracyte has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500. Comparatively, Accuray has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Veracyte and Accuray, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veracyte	1	3	4	1	2.56
Accuray	1	2	0	0	1.67

Veracyte presently has a consensus target price of $47.57, suggesting a potential downside of 6.58%. Accuray has a consensus target price of $2.00, suggesting a potential upside of 496.30%. Given Accuray’s higher probable upside, analysts plainly believe Accuray is more favorable than Veracyte.

Profitability

This table compares Veracyte and Accuray’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veracyte	16.25%	9.07%	8.38%
Accuray	-10.76%	-79.43%	-10.38%

Earnings and Valuation

This table compares Veracyte and Accuray”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veracyte	$541.74 million	7.50	$66.35 million	$1.09	46.72
Accuray	$458.51 million	0.09	-$1.59 million	($0.37)	-0.91

Veracyte has higher revenue and earnings than Accuray. Accuray is trading at a lower price-to-earnings ratio than Veracyte, indicating that it is currently the more affordable of the two stocks.

Summary

Veracyte beats Accuray on 12 of the 15 factors compared between the two stocks.

About Veracyte

Veracyte, Inc. engages in the research, development and commercialization of diagnostic products. The firm’s portfolio includes Afirma, Percepta, and Envisia. It intends to treat thyroid cancer, improve lung cancer screening, and clarify the diagnosis of idiopathic pulmonary fibrosis. The company was founded by Bonnie H. Anderson and Y. Douglas Dolginow on August 15, 2006 and is headquartered in South San Francisco, CA.

About Accuray

Accuray Incorporated designs, develops, manufactures, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the United States, Canada, Latin America, Asia, Australia, New Zealand, Europe, the Middle East, India, Africa, Japan, and China. It offers the CyberKnife platform, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of primary and metastatic tumors outside the brain, including tumors on or near the spine and in the breast, kidney, liver, lung, pancreas, and prostate. The company also provides the TomoTherapy platform, including the Radixact System, which allows for integrated radiation treatment planning, delivery, and data management, enabling clinicians to deliver ultra-precise treatments to approximately 50 patients per day; iDMS data management system, a fully integrated treatment planning and data management systems; and Accuray precision treatment planning system, a treatment planning and data management systems. In addition, it offers post-contract customer support, installation, training, and other professional services. The company primarily markets its products directly to customers, including hospitals and stand-alone treatment facilities through its sales organization, as well as to customers through sales agents and group purchasing organizations in the United States; and to customers directly and through distributors and sales agents internationally. Accuray Incorporated was incorporated in 1990 and is headquartered in Madison, Wisconsin.