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1. Company Snapshot

1.a. Company Description

RaySearch Laboratories AB (publ), a medical technology company, develops software solutions for cancer treatment worldwide.It develops and markets RayStation, a treatment planning system for treatment activities, such as automated planning, adaptive therapy, multi-criteria optimization, fast and accurate dose computations, OAR dose reduction, robustness, machine learning, VMAT, IMRT, 3D-CRT, virtual simulation, electron beam therapy, tomotherapy, stereotactic, proton therapy, carbon ion therapy, and boron neutron capture therapy.The company also develops RayPlan, a treatment planning system for supporting a range of treatment planning activities for 3D-CRT, IMRT, VMAT, tomotherapy, and electron beam radiation therapy; and RayCare, an oncology information system to support cancer treatment activities.


In addition, it offers RayCommand, a treatment control system that is compatible with various hardware models and supports advanced functionalities of treatment machines and software systems; and RayIntelligence, a cloud-based oncology analytics system that turns patient data into insights.Further, the company provides training courses related to its products.RaySearch Laboratories AB (publ) is headquartered in Stockholm, Sweden.

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1.b. Last Insights on RAY

RaySearch Laboratories AB faces challenges despite a 13% increase in net sales and 70% surge in order intake, as cash flow and currency headwinds impact its financials. The company's recent earnings call highlighted these concerns. Additionally, the European market's pullback, driven by overvaluation concerns in AI-related stocks, may affect investor sentiment. RaySearch's growth potential is notable, but it must navigate these challenges to sustain momentum, particularly with the release of new products like RayIntelligence v2025.

1.c. Company Highlights

2. RaySearch Laboratories' Q3 2025 Earnings: A Strong Performance

RaySearch Laboratories reported a robust Q3 2025, with net sales reaching a record high of SEK 332 million, a 13% increase year-over-year. The operating profit rose 44% to SEK 89 million, resulting in an EBIT margin of 27%, and 31% when adjusted for costs associated with the global employee conference. Earnings per share (EPS) came in at SEK 2.09, significantly beating estimates of SEK 1.32. Recurring support revenue grew 8% to SEK 130 million, representing 39% of total revenues. The strong performance was driven by increased demand for the company's solutions, including significant deliveries to major particle centers in Asia.

Publication Date: Nov -30

📋 Highlights
  • Record Net Sales:: Achieved SEK 332 million in Q3 2025, a 13% increase driven by 6 major particle center deliveries in Asia.
  • Operating Profit Growth:: Operating profit surged 44% to SEK 89 million with a 27% EBIT margin (31% adjusted), exceeding the 2026 target of 25%.
  • Recurring Revenue Dominance:: Recurring support revenue grew 8% to SEK 130 million, accounting for 39% of total revenues.
  • Order Intake Surge:: 70% increase in orders, with a 14% rolling 12-month growth and a strong book-to-bill ratio of 0.9.
  • Cash Position & Margin:: Cash balance of SEK 323 million (no loans) and a 96% gross margin, skewed by low hardware sales.

Business Highlights

The company saw a 70% increase in order intake, with many existing customers expanding their installations. RaySearch has a strong pipeline, with a book-to-bill ratio of 0.9 and a rolling 12-month growth rate of 14%. The company launched RayIntelligence, a cloud-based oncology analytics platform, and is working towards providing comprehensive cancer care solutions. The license sales were evenly split between the installed base and new customers, with a notable campaign allowing customers to use RayStation's functionality for a limited period being well-received.

Product and Customer Dynamics

About half of the new license sales to new customers came from converting Pinnacle clinics to RayStation, with the remainder coming from converting other systems, mainly Monaco and Eclipse. The company believes it has more than 50% of the accounts that are converting from Pinnacle. The revenue model for RayCare is similar to RayStation, with a license fee plus support revenue, but at a slightly higher price point based on patient volume or throughput.

Valuation and Outlook

With a P/E Ratio of 36.37 and an EV/EBITDA of 29.43, the market appears to have priced in significant growth expectations. Analysts estimate revenue growth of 12.4% for the next year. Given the company's strong performance, increasing EBIT margin, and potential for future revisions to its targets, the current valuation may be justified. RaySearch is well-positioned to benefit from the discontinuation of Philips' radiation therapy systems, and its ongoing integration efforts with other vendors' hardware, such as Varian's Halcyon, are expected to drive future growth.

Financial Position

The company's cash balance stood at SEK 323 million, with no loans, providing a solid foundation for future investments and growth initiatives. The gross margin was 96%, unusually high due to lower hardware sales. With a strong order pipeline and a confident outlook, RaySearch is poised to continue its growth trajectory, potentially revising its EBIT margin targets upward in the future.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.21%)

6. Segments

Licenses

Expected Growth: 10.2%

Growing demand for advanced radiation therapy and increasing adoption of oncology information systems drive the growth of RaySearch Laboratories' licenses. The company's innovative treatment planning systems and strategic partnerships further fuel the segment's expansion.

Support

Expected Growth: 10.2%

Growing demand for advanced radiation therapy and increasing adoption of digital healthcare solutions drive the growth of RaySearch Laboratories' oncology and radiation therapy treatment planning software, supported by its comprehensive customer support and training services.

Hardware

Expected Growth: 10.3%

Growing demand for advanced radiation therapy, increasing adoption of digital healthcare, and rising incidence of cancer drive the growth of RaySearch Laboratories' medical devices and software solutions.

Training and Other

Expected Growth: 10.2%

Growing demand for radiation oncology training and increasing adoption of RaySearch's treatment planning system drive the growth of the training and other services segment.

7. Detailed Products

RayStation

A treatment planning system for cancer treatment, allowing for precise radiation therapy planning and optimization.

RayCare

An oncology information system for managing patient data, treatment plans, and clinical workflows.

RayIntelligence

An artificial intelligence and machine learning platform for radiation oncology, enabling data-driven decision making.

8. RaySearch Laboratories AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

RaySearch Laboratories AB (publ) operates in a niche market with limited substitutes, but the company's products and services can be substituted with other radiation oncology treatment planning systems.

Bargaining Power Of Customers

RaySearch Laboratories AB (publ) has a diverse customer base, and no single customer accounts for a significant portion of the company's revenue, reducing the bargaining power of customers.

Bargaining Power Of Suppliers

RaySearch Laboratories AB (publ) has a diversified supply chain, and the company is not heavily dependent on a single supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The radiation oncology treatment planning system market has high barriers to entry, including significant research and development costs, regulatory hurdles, and the need for specialized expertise, making it difficult for new entrants to enter the market.

Intensity Of Rivalry

The radiation oncology treatment planning system market is moderately competitive, with a few established players, including RaySearch Laboratories AB (publ), but the company's strong brand recognition and innovative products and services help to differentiate it from competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.86%
Debt Cost 3.95%
Equity Weight 58.14%
Equity Cost 10.00%
WACC 7.46%
Leverage 72.00%

11. Quality Control: RaySearch Laboratories AB (publ) passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Nexus

A-Score: 5.6/10

Value: 2.0

Growth: 7.2

Quality: 7.9

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
RaySearch Laboratories

A-Score: 4.9/10

Value: 0.5

Growth: 8.4

Quality: 7.6

Yield: 1.2

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Craneware

A-Score: 4.9/10

Value: 1.6

Growth: 6.7

Quality: 7.6

Yield: 2.5

Momentum: 8.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
CompuGroup Medical

A-Score: 4.7/10

Value: 4.6

Growth: 4.2

Quality: 4.1

Yield: 0.6

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Equasens

A-Score: 4.2/10

Value: 4.6

Growth: 4.9

Quality: 7.2

Yield: 4.4

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Kneat

A-Score: 4.0/10

Value: 2.0

Growth: 7.8

Quality: 3.8

Yield: 0.0

Momentum: 7.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

228.5$

Current Price

228.5$

Potential

-0.00%

Expected Cash-Flows