Accuray (ARAY) Stock Forecast & Price Target

Accuray Inc. has demonstrated positive momentum in its Service revenue, achieving a year-over-year growth of 4%, driven by strong contract revenue growth of 10%. The company's focus on improving Service gross margins through higher pricing, enhanced product reliability, and reduced costs has further supported a favorable profitability profile. Additionally, management anticipates a meaningful enhancement in system installations and revenue recognition in the second half of FY26, contributing to improved investor sentiment.

Accuray Inc reported product revenue of $37.2 million for F1Q, which fell short of expectations due to weaknesses in the EIMEA region and China, compounded by geopolitical pressures that have led management to lower future revenue forecasts. In F2Q, the company experienced a significant decline in orders from its China joint venture, delivering only 11 systems compared to 27 in the same quarter the previous year, and reported no CyberKnife shipments to China during the quarter. Additionally, the company posted an EBITDA loss of approximately $4 million, which was below expectations and attributed to adverse geographic mix and joint venture accounting, leading to a cautious outlook on gross orders through the remainder of the fiscal year.