Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Accuray (Nasdaq: ARAY) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.
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- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ACCURAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 38.10% is the gross profit margin for ACCURAY INC which we consider to be strong. Regardless of ARAY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARAY's net profit margin of -29.16% significantly underperformed when compared to the industry average.
- ARAY, with its decline in revenue, underperformed when compared the industry average of 2.9%. Since the same quarter one year prior, revenues fell by 17.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.07 is sturdy.
- ACCURAY INC has improved earnings per share by 10.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACCURAY INC reported poor results of -$1.02 versus -$0.44 in the prior year. This year, the market expects an improvement in earnings (-$0.48 versus -$1.02).
-- Written by a member of TheStreet Ratings Staff