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

Valuation and Earnings

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This table compares Accuray and Viewray’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Accuray $383.41 million 1.16 -$29.57 million ($0.29) -17.93
Viewray $34.04 million 14.07 -$72.17 million ($1.26) -5.62

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

Analyst Ratings

This is a summary of current recommendations and price targets for Accuray and Viewray, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Accuray 1 2 3 0 2.33
Viewray 0 0 6 0 3.00

Accuray presently has a consensus price target of $7.40, suggesting a potential upside of 42.31%. Viewray has a consensus price target of $11.58, suggesting a potential upside of 63.61%. Given Viewray’s stronger consensus rating and higher probable upside, analysts clearly believe Viewray is more favorable than Accuray.

Volatility & Risk

Accuray has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, Viewray has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Insider and Institutional Ownership

82.0% of Accuray shares are owned by institutional investors. Comparatively, 80.8% of Viewray shares are owned by institutional investors. 3.9% of Accuray shares are owned by insiders. Comparatively, 62.8% of Viewray shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Accuray -6.09% -44.66% -5.20%
Viewray -212.02% N/A -60.04%

Summary

Accuray beats Viewray on 7 of the 13 factors compared between the two stocks.

Accuray Company Profile

Accuray Incorporated designs, develops, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the body. The company offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of various types of cancer and tumors in the body. The CyberKnife System automatically tracks, detects, and corrects for tumor and patient movement in real-time during the procedure, as well as enables the delivery of precise, high dose radiation while patients breathe normally. It also offers the TomoTherapy System, which consists of an integrated and versatile radiation therapy system used for the treatment of a range of cancer types. The company markets its products in the United States directly, as well as through a sales agent and group purchasing organizations; and directly and through distributors and sales agents in Europe, Japan and other countries of Asia, South America, and internationally to hospitals and stand-alone treatment facilities. Accuray Incorporated was incorporated in 1990 and is headquartered in Sunnyvale, California.

Viewray Company Profile

ViewRay, Inc. designs, manufactures and markets MRIdian, the magnetic resonance imaging (MRI)-guided radiation therapy system to image and treat cancer patients simultaneously. The Company offers radiation therapy technology combined with magnetic resonance imaging. MRIdian integrates MRI technology, radiation delivery and the Company’s software to locate, target and track the position and shape of soft-tissue tumors while radiation is delivered. MRIdian delivers radiation to the tumor accurately while delivering less radiation to healthy tissue. MRIdian provides real-time imaging that defines the targeted tumor from the surrounding soft tissue and other critical organs during radiation treatment. MRIdian allows physicians to record the level of radiation exposure that the tumor has received and adapt the prescription between fractions as needed.

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