On April 16, we have updated our research report on
). Despite being a loss-making company, we expect the company's
product revenues to improve further as medical centers continue
to adopt the company's innovative radiosurgery and radiation
therapy systems on a global basis.
ACCURAY INC (ARAY): Free Stock Analysis
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Accuray posted a narrower loss of $5.4 million, or 7 cents per
share for the fiscal 2014-second quarter compared with a loss of
$25.5 million, or 35 cents per share for the same quarter in the
prior fiscal year as well as the Zacks Consensus Estimate of a
loss of 20 cents per share. The narrower loss can be attributed
to higher revenues and a substantial fall in operating expenses
during the quarter.
Total revenues grew 20.4% to $93.6 million, surpassing the Zacks
Consensus Estimate of $81.0 million significantly. Product
revenues surged 36.1% to $45.1 million while Service revenues
rose 8.7% to $45.5 million.
The improvement in Product revenues was attributable to
impressive rise in product orders. Gross product orders almost
doubled (102%) to $80.3 million in the quarter while net product
orders (gross orders less cancellations and age-outs) soared 232%
to $59.4 million in the second quarter.
At the end of the quarter, product backlog was $362 million, up
roughly 30% from the backlog at the end of the fiscal 2013-second
quarter. The increase in Service revenues was driven by the
higher installed base and conversion of customers to emerald and
diamond service contracts.
For fiscal 2014 ending June this year, Accuray upgraded its
revenue guidance to a range of $340 to $350 million from the
prior range of $325 to $345 million based on its performance in
the first half of fiscal 2014 and optimism triggered by the
continued momentum of converting orders to revenues. The current
Zacks Consensus Estimate of $344 million lies within the guided
However, Accuray expects lower net orders in second half of
fiscal 2014 compared with the net orders in the first half of the
fiscal year. With this, Accuray expects to end the fiscal year
with net product orders of $215 to $225 million, reflecting
25-31% growth over the prior fiscal year.
Currently, Accuray retains a Zacks Rank #2 (Buy). The company
expects to release its fiscal 2014-third quarter results on April
Other medical instrument stocks that are currently worth a look
Delcath Systems, Inc.
Syneron Medical Ltd.
). Delcath Systems and Syneron Medical sport a Zacks Rank #1
(Strong Buy), while DexCom carries a Zacks Rank #2 (Buy).