Accuray (NASDAQ:ARAY) versus ArthroCare (ARTC) Critical Contrast

ArthroCare (NASDAQ: ARTC) and Accuray (NASDAQ:ARAY) are both healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ArthroCare N/A N/A N/A $0.40 N/A
Accuray $383.41 million 1.07 -$29.57 million ($0.35) -14.00

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

Analyst Ratings

This is a summary of recent ratings for ArthroCare and Accuray, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArthroCare 0 0 0 0 N/A
Accuray 1 2 4 0 2.43

Accuray has a consensus price target of $7.17, indicating a potential upside of 46.26%.

Insider and Institutional Ownership

78.9% of Accuray shares are owned by institutional investors. 3.9% of Accuray shares are owned by company 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 ArthroCare and Accuray’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArthroCare N/A N/A N/A
Accuray -7.49% -55.18% -6.33%

About ArthroCare

ArthroCare Corporation (ArthroCare) is a medical device company. ArthroCare develops and manufactures surgical devices, instruments, and implants. Its devices enable surgical procedures and enable new minimally invasive procedures. Many of ArthroCare’s devices use its Coblation technology. This technology dissolves target tissue and limits damage to surrounding healthy tissue. ArthroCare also develops surgical devices utilizing other patented technology, including its OPUS line of fixation products, as well as re-usable surgical instruments. ArthroCare’s two core product consists of sports medicine and ear, nose, and throat (ENT), as well as other areas, such as spine, wound care, urology and gynecology. It’s Sports Medicine, ENT and other products are marketed and sold through two principal geographic distribution channels: Americas (North and South America) and International (all other geographies). In May 2014, Smith & Nephew PLC acquired the Company.

About Accuray

Accuray Incorporated is a radiation oncology company. The Company develops, manufactures and markets medical devices used in radiation therapy for the treatment of cancer patients. Its products include the CyberKnife Systems, the TomoTherapy Systems, and the Radixact Delivery Treatment Platform. Its technologies, the CyberKnife and TomoTherapy Systems, are designed to deliver treatments, including stereotactic radiosurgery (SRS), stereotactic body radiation therapy (SBRT), intensity modulated radiation therapy (IMRT), image guided radiation therapy (IGRT) and adaptive radiation therapy. The CyberKnife Systems are robotic systems that are used to treat various types of cancer and tumors throughout the body. The CyberKnife Systems track, detect and correct for tumor and patient movement in real-time during the procedure. The TomoTherapy Systems include the TomoTherapy H Series with configuration options of TomoH, TomoHD and TomoHDA.

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