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Here's Why You Should Invest in Accuray (ARAY) Stock Now

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Accuray Incorporated (ARAY - Free Report) is currently one of the best-performing stocks in the Medical Instruments industry.

Notably, growing adoption of non-surgical treatment options among cancer patients, increasing demand for Accuray’s latest offerings, and successful execution of restructuring plans bode well for the company.

Impressive Share Price Performance

A glimpse at this Zacks Rank #2 (Buy) company's price trend reveals that it has outperformed the industry in three month's time. The stock has surged 2.4%, significantly higher than the industry’s decline of 4.6%.

 

Which Way are Estimates Treading?

The Zacks Consensus Estimate for second-quarter fiscal 2019 is pegged at a loss of 6 cents. For the full year, the consensus mark stands at a loss of 14 cents.

The same for revenues is pinned at $104 million for the fiscal second quarter, reflecting a 3.7% rise year over year. For fiscal 2019, the same for revenues stands at $422.1 million, up 4.3% year over year.

Accuray Incorporated Price and Consensus

 

Let us take a quick look at three important factors that make Accuray a solid pick for now.

Factors at Play

Cost Saving Initiative

Management at Accuray has implemented a new initiative to reduce operating costs. This is expected to have a non-recurring charge of $1.5 million to $2 million in the second quarter of fiscal 2019.

For investors’ notice, the company expects annualized cost savings of approximately $15 million from the next year compared with the figure registered in fiscal 2018.

The benefit of this latest initiative is projected to be realized by the fourth quarter of fiscal 2019.

Global Reach

Accuray has been fortifying its foothold globally. Earlier this year, the company received regulatory approval from India to sell its flagship Radixact X9 system. Management is optimistic about this development as it will expand Accuray’s precision treatment solutions in emerging markets. The company also has a strong presence across leading hospitals in India.

Apart from India, Accuray continues to see increased orders from China in the Asia-Pacific zone. Meanwhile, Radixact registered a solid first quarter in Japan. Management expects the momentum to continue in the quarters ahead.

Accuray continues to gain from the EMEA region, which accounted for almost half of the gross orders in the fiscal first quarter. Notably, sales in the region grew 10% on a year-over-year basis.

Gross Orders Surge

In the first quarter of fiscal 2019, gross orders totaled $61.4 million, up 10.4% on a year-over-year basis. Per management, this uptick was driven by strong demand for the company’s flagship Radixact system. Gross orders doubled year over year, on approximately 25 system orders. This highlights the growing market interest and adoption of Accuray’s newest generation treatment offering.

Key Picks

A few top-ranked stocks in the broader medical space are Quidel Corporation (QDEL - Free Report) , STAAR Surgical Company (STAA - Free Report) and Veeva Systems (VEEV - Free Report) .

Quidel Corporation has a long-term expected earnings growth rate of 25% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

With a Zacks Rank #1, STAAR Surgical delivered an average four-quarter positive earnings surprise of 400%.

Veeva Systems’ long-term earnings growth rate is projected at 19.3%. The stock carries a Zacks Rank of 2.

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