Thoratec (NASDAQ: THOR) and Accuray (NASDAQ:ARAY) are both healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitabiliy, valuation, dividends, analyst recommendations and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Thoratec 10.29% 8.02% 6.71%
Accuray -8.61% -61.49% -7.32%

Valuation and Earnings

This table compares Thoratec and Accuray’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Thoratec N/A N/A N/A N/A N/A
Accuray $366.29 million 1.04 -$5.10 million ($0.38) -12.11

Thoratec has higher revenue, but lower earnings than Accuray.

Institutional & Insider Ownership

84.2% of Accuray shares are held by institutional investors. 2.9% of Accuray shares are held 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.

Analyst Ratings

This is a breakdown of current recommendations for Thoratec and Accuray, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Thoratec 0 0 0 0 N/A
Accuray 0 3 3 0 2.50

Accuray has a consensus target price of $7.40, suggesting a potential upside of 60.87%. Given Accuray’s higher probable upside, analysts clearly believe Accuray is more favorable than Thoratec.

Summary

Accuray beats Thoratec on 5 of the 8 factors compared between the two stocks.

Thoratec Company Profile

Thoratec Corporation develops, manufactures and markets medical devices used for mechanical circulatory support for the treatment of heart failure patients. The Company’s products include ventricular assist devices (VADs), such as HeartMate II Left Ventricular Assist System (HeartMate II), HeartMate III Left Ventricular Assist System, Thoratec Paracorporeal Ventricular Assist Device (PVAD) and Thoratec Implantable Ventricular Assist Device (IVAD). For acute circulatory support, the Company’s product lines are CentriMag Acute Circulatory System (CentriMag) and for pediatric patients PediMag/PediVAS Acute Circulatory System (PediMag/PediVAS). HeartMate III, a centrifugal-flow, chronic, left ventricular assist system.

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.

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