Thoratec (NASDAQ: THOR) 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, earnings, analyst recommendations, valuation, profitabiliy, dividends and risk.

Earnings and Valuation

This table compares Thoratec and Accuray’s gross revenue, earnings per share 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 1.03 -$5.10 million ($0.38) -11.97

Thoratec has higher revenue, but lower earnings than Accuray.

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%

Analyst Ratings

This is a summary of current ratings for Thoratec and Accuray, as reported by MarketBeat.com.

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 price target of $7.40, suggesting a potential upside of 62.64%. Given Accuray’s higher possible upside, analysts plainly believe Accuray is more favorable than Thoratec.

Insider & Institutional Ownership

84.2% of Accuray shares are owned by institutional investors. 2.9% of Accuray shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

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

About Thoratec

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.

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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