Comparing Accuray (ARAY) and Natus Medical (NASDAQ:BABY)

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

Institutional and Insider Ownership

80.5% of Accuray shares are held by institutional investors. Comparatively, 99.6% of Natus Medical shares are held by institutional investors. 3.9% of Accuray shares are held by company insiders. Comparatively, 5.5% of Natus Medical shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Accuray and Natus Medical’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 1.12 -$29.57 million ($0.29) -17.41
Natus Medical $500.97 million 1.89 -$20.29 million ($0.62) -49.03

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

Volatility & Risk

Accuray has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Natus Medical has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Accuray and Natus Medical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Accuray 1 2 4 0 2.43
Natus Medical 0 1 1 0 2.50

Accuray presently has a consensus target price of $7.40, suggesting a potential upside of 46.53%. Natus Medical has a consensus target price of $49.00, suggesting a potential upside of 61.18%. Given Natus Medical’s stronger consensus rating and higher possible upside, analysts clearly believe Natus Medical is more favorable than Accuray.

Profitability

This table compares Accuray and Natus Medical’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%
Natus Medical -4.05% 11.36% 6.96%

Summary

Natus Medical beats Accuray on 10 of the 14 factors compared between the two stocks.

Accuray Company Profile

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.

Natus Medical Company Profile

Natus Medical Incorporated is a provider of newborn care and neurology healthcare products and services used for the screening, diagnosis, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, neuromuscular diseases and balance and mobility disorders. The Company’s product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products, such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, incubators to control the newborn’s environment, and software systems for managing and tracking disorders and diseases for public health laboratories. The Company is organized into three strategic business units: Neurology, Newborn Care and Otometrics.

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