“Concerning; Guidance Lowered as Predicted; Neutral Accuray showed strong order growth in the quarter driven by a mix of Cyberknife, Radixact and a modest contribution from On-Rad across multiple geographies. While gross orders were strong, the revenue was significantly below expectations and, just as we predicted, revenue guidance for FY17 was lowered $30M to $380M to $390M from $410M to $420M previously (we modeled $395M heading into the print). ARAY is seeing a large proportion of orders OUS and into distributors with limited lines of sight on when those orders begin to convert to revenue which makes it challenging, not only to guide from mgmt.’s viewpoint, but also tough to model from our perspective. The company undertook a restructuring in the Q to improve these processes but we feel this will take multiple quarters to improve. Many companies within MedTech rely on OUS distributors but have limited predictability on sales OUS and we do not believe ARAY is immune to those challenges. All told, we maintain our Neutral rating and need to see revenue conversion consistently. Soft GMs limit improvements in adjusted EBITDA growth. Mgmt has undertaken steps to improve COGS but volume swings in units continue to impact gross margins Q-to-Q. GMs came in 400bps below our expectations and will come in at ~37% for FY17. We expect GMs to remain in the low 40s in FY18 and beyond. Adj. EBTIDA guidance for FY17 was also lowered to $22M to $26M from $32M to $38M driven by the lowered revenue and soft GMs.”,” BTIG Research’s analyst wrote.
ARAY has been the topic of several other reports. Zacks Investment Research upgraded Accuray from a hold rating to a buy rating and set a $5.25 target price on the stock in a report on Tuesday, April 4th. Jefferies Group LLC restated a buy rating and set a $7.00 target price (down from $8.00) on shares of Accuray in a report on Saturday, April 29th. Finally, Aegis assumed coverage on Accuray in a report on Monday, February 6th. They set a buy rating and a $7.00 target price on the stock. One research analyst has rated the stock with a sell rating, three have given a hold rating and four have assigned a buy rating to the company’s stock. Accuray presently has a consensus rating of Hold and a consensus price target of $7.75.
Shares of Accuray (NASDAQ:ARAY) opened at 4.00 on Friday. The firm has a 50 day moving average price of $4.47 and a 200 day moving average price of $4.96. The stock’s market cap is $332.00 million. Accuray has a 12-month low of $3.95 and a 12-month high of $6.39.
Accuray (NASDAQ:ARAY) last issued its earnings results on Thursday, April 27th. The medical equipment provider reported ($0.06) earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.01 by $0.07. The company had revenue of $97.31 million for the quarter, compared to analyst estimates of $110.23 million. Accuray had a negative return on equity of 46.38% and a negative net margin of 6.88%. The company’s revenue for the quarter was down 7.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.01 earnings per share. On average, equities analysts expect that Accuray will post ($0.30) EPS for the current year.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Peregrine Capital Management LLC acquired a new position in Accuray during the third quarter worth approximately $15,148,000. Norges Bank acquired a new position in Accuray during the fourth quarter worth approximately $9,179,000. Russell Investments Group Ltd. acquired a new position in Accuray during the fourth quarter worth approximately $5,351,000. Neuberger Berman Group LLC raised its stake in shares of Accuray by 26.7% in the first quarter. Neuberger Berman Group LLC now owns 5,014,941 shares of the medical equipment provider’s stock worth $23,821,000 after buying an additional 1,057,654 shares during the last quarter. Finally, Vident Investment Advisory LLC raised its stake in shares of Accuray by 212.7% in the first quarter. Vident Investment Advisory LLC now owns 1,553,111 shares of the medical equipment provider’s stock worth $7,377,000 after buying an additional 1,056,395 shares during the last quarter. Hedge funds and other institutional investors own 91.66% of the company’s stock.
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.
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