| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 18.00 | 2208 |
| Intrinsic value (DCF) | 0.60 | -23 |
| Graham-Dodd Method | 0.10 | -87 |
| Graham Formula | n/a |
Accuray Incorporated (LSE: 0H8I.L) is a pioneering leader in advanced radiosurgery and radiation therapy systems, specializing in innovative cancer treatment solutions. Headquartered in Sunnyvale, California, the company develops and markets the CyberKnife System, a robotic stereotactic radiosurgery platform, and the TomoTherapy/Radixact System, a precision radiation therapy solution. These cutting-edge technologies target tumors across multiple body regions, including prostate, lung, brain, and liver cancers. Accuray operates globally, serving hospitals and treatment centers in the Americas, Europe, Asia-Pacific, and the Middle East through direct sales and distributor networks. With a strong focus on post-contract support, training, and professional services, Accuray enhances patient outcomes while maintaining a competitive edge in the medical equipment sector. Despite financial challenges, its technological differentiation and global footprint position it as a key player in the $6 billion+ radiation therapy market.
Accuray presents a high-risk, high-reward investment case. Its innovative CyberKnife and Radixact systems offer differentiated technology in radiation oncology, a market projected to grow at a 7% CAGR. However, the company’s financials reveal challenges: a negative net income (-$15.5M), diluted EPS (-$0.16), and negative operating cash flow (-$11.9M) in FY2024. With a market cap of $160M and a leveraged balance sheet ($210M debt vs. $68M cash), liquidity risks persist. The stock’s high beta (1.31) signals volatility, likely tied to its growth-stage profile and competitive pressures. Catalysts include adoption of AI-driven treatment planning and expansion in emerging markets, but execution risks and reimbursement hurdles remain key concerns. Suitable for speculative investors with a long-term horizon.
Accuray competes in the radiation therapy segment by emphasizing precision and flexibility. The CyberKnife’s robotic delivery system differentiates it from conventional linear accelerators (LINACs), enabling non-invasive treatment of moving tumors (e.g., lung). The Radixact platform competes with Varian’s Halcyon and Elekta’s Unity by offering adaptive radiotherapy with helical delivery. However, Accuray’s smaller scale (~$447M revenue) limits R&D spending versus larger rivals. Its software ecosystem (e.g., Precision® Treatment Planning) lags behind Varian’s AI-powered tools. Geographically, Accuray has strength in Japan and China but underpenetrates Europe compared to Elekta. Pricing is a relative advantage—systems cost ~$3–4M versus $4M+ for competitors—but this pressures margins. Service revenue (25% of total) is sticky but trails Varian’s 30%+ service attach rates. The lack of a proton therapy offering (unlike Ion Beam Applications) narrows its addressable market. Partnerships, like its alliance with Siemens Healthineers, help mitigate resource gaps but don’t fully offset scale disadvantages.