Contrasting Hologic (HOLX) and Accuray (ARAY)

Hologic (NASDAQ: HOLX) and Accuray (NASDAQ:ARAY) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Earnings and Valuation

This table compares Hologic and Accuray’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hologic $3.06 billion 3.93 $755.50 million $2.64 16.50
Accuray $383.41 million 1.11 -$29.57 million ($0.34) -14.85

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

Profitability

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

Net Margins Return on Equity Return on Assets
Hologic 24.70% 21.69% 7.20%
Accuray -7.49% -55.18% -6.33%

Volatility & Risk

Hologic has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Accuray has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Hologic and Accuray, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hologic 0 4 9 1 2.79
Accuray 0 3 4 0 2.57

Hologic currently has a consensus target price of $47.86, indicating a potential upside of 9.84%. Accuray has a consensus target price of $7.17, indicating a potential upside of 41.91%. Given Accuray’s higher possible upside, analysts plainly believe Accuray is more favorable than Hologic.

Institutional & Insider Ownership

98.1% of Hologic shares are held by institutional investors. Comparatively, 78.9% of Accuray shares are held by institutional investors. 0.8% of Hologic shares are held by insiders. Comparatively, 3.9% of Accuray shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Hologic beats Accuray on 11 of the 14 factors compared between the two stocks.

About Hologic

Hologic, Inc. is a developer, manufacturer and supplier of diagnostics products, medical imaging systems and surgical products with an emphasis on women’s health. The Company operates through four segments: Diagnostics, Breast Health, GYN Surgical and Skeletal Health. The diagnostics products include Aptima family of assays, ThinPrep system, the Rapid Fetal Fibronectin Test and Procleix blood screening assays. It offers viral load assays for the quantitation of Hepatitis B Virus (HBV), Hepatitis C Virus (HCV) and Human Immunodeficiency Virus-1 (HIV-1). The Breast Health products include breast imaging and related products and accessories, including digital mammography systems, computer-aided detection (CAD) and breast biopsy guidance systems. The GYN Surgical products include NovaSure Endometrial Ablation System and MyoSure Hysteroscopic Tissue Removal System. The Skeletal Health segment offers Discovery and Horizon X-ray bone densitometers and mini C-arm imaging systems.

About Accuray

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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