At US$04.325, Is It Time To Buy Accuray Incorporated (NASDAQ:ARAY)?
Accuray Incorporated (NASDAQ:ARAY), a medical equipment company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $5.7 at one point, and dropping to the lows of $4.28. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Accuray’s current trading price of $4.33 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Accuray’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Accuray
What’s the opportunity in Accuray?
According to my valuation model, Accuray seems to be fairly priced at around 19.77% above my intrinsic value, which means if you buy Accuray today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $3.61, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Accuray’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Accuray generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Accuray’s earnings over the next few years are expected to increase by 58.35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ARAY’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on ARAY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Accuray. You can find everything you need to know about Accuray in the latest infographic research report. If you are no longer interested in Accuray, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
