Reviewing Accuray (ARAY) & GenMark Diagnostics (GNMK)

GenMark Diagnostics (NASDAQ: GNMK) and Accuray (NASDAQ:ARAY) are both small-cap healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
GenMark Diagnostics -132.79% -71.04% -44.95%
Accuray -7.49% -55.18% -6.33%

Analyst Recommendations

This is a breakdown of current ratings and target prices for GenMark Diagnostics and Accuray, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GenMark Diagnostics 0 1 5 0 2.83
Accuray 0 3 4 0 2.57

GenMark Diagnostics currently has a consensus target price of $11.80, indicating a potential upside of 151.06%. Accuray has a consensus target price of $7.17, indicating a potential upside of 36.51%. Given GenMark Diagnostics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe GenMark Diagnostics is more favorable than Accuray.

Institutional & Insider Ownership

78.9% of Accuray shares are held by institutional investors. 7.5% of GenMark Diagnostics shares are held by insiders. Comparatively, 3.9% of Accuray shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GenMark Diagnostics $49.27 million 5.23 -$50.60 million ($1.22) -3.85
Accuray $383.41 million 1.15 -$29.57 million ($0.35) -15.00

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

Risk and Volatility

GenMark Diagnostics has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Accuray has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Summary

Accuray beats GenMark Diagnostics on 8 of the 13 factors compared between the two stocks.

GenMark Diagnostics Company Profile

GenMark Diagnostics, Inc. is a molecular diagnostics company. The Company is focused on developing and commercializing multiplex molecular tests that aid in the diagnosis of complex medical conditions. It develops and commercializes multiplex molecular tests based on its eSensor electrochemical detection technology. It offers four Food and Drug Administration (FDA)-cleared diagnostic tests which run on its XT-8 instrument; its Respiratory Viral Panel; its Cystic Fibrosis Genotyping Test; its Warfarin Sensitivity Test, and its Thrombophilia Risk Test. It also offers a Hepatitis C (HCV) genotyping test and associated custom manufactured reagents, as well as a 2C19 Genotyping Test, versions of which are available for use with its XT-8 instrument for research use only (RUO). Its XT-8 and ePlex test cartridges utilize the combination of distinct electrodes and multiple signal probes to detect dozens of target biomarkers from a single sample, thereby enabling highly multiplexed testing.

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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