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Accuray (ARAY) Climbs 11.5% as Q1 Earnings Beat Estimates

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Accuray Incorporated (ARAY - Free Report) rallied 11.5% on Nov 2 after the company reported first-quarter fiscal 2021 earnings results.

The company reported break-even earnings per share (EPS) in first-quarter fiscal 2021 against the Zacks Consensus Estimate of a loss per share of 9 cents. Also, the company had reported a loss of 11 cents per share a year ago.

Revenue Details

For the fiscal first quarter, net revenues totaled $85.3 million, beating the Zacks Consensus Estimate of $77 million by 8%. On a year-over-year basis, revenues fell 4.8%.

Fiscal Q1 Details

Product Revenues: Product revenues fell 16.6% year over year to $31.3 million in the reported quarter.

Service Revenues: Service revenues totaled $54.1 million, up 4% from the year-ago quarter.

Gross Order Update: Gross orders in the fiscal first quarter totaled $50.5 million, down 35.7% year over year.

Margins

Gross profit in the fiscal first quarter totaled $35.4 million, up 7.5% on a year-over-year basis. Gross margin was 41.5%, highlighting an expansion of 471 basis points (bps) year over year.

Total operating expenses came in at $29.9 million, down 19.6%.

First-quarter operating profit was $5.5 million, down 227.8%. Operating margin came in at 6.4%, highlighting an expansion of 1119 bps.

Accuray Incorporated Price, Consensus and EPS Surprise

 

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote

Cash Position

The company exited first-quarter fiscal 2021 with total cash and cash equivalents of $89.9 million compared with $107.6 million at the end of the fourth quarter of fiscal 2020.

2021 Guidance

Considering the continued spread of the COVID-19 pandemic and the uncertainty of its impact on the global economy and the healthcare industry, Accuray has decided not to issue any financial guidance for 2021.

Our Take

Accuray exited the fiscal first quarter on a mixed note. The company registered decline in Product revenues in the quarter. We are also concerned about the gross order decline in the quarter.

On the bright side, the company registered growth in Service revenues in the quarter. Solid demand for the Radixact, CyberKnife and TomoTherapy platforms continues to drive the top line. Expansion of both margins is encouraging as well. Recently, the company launched the ClearRT Helical kVCT Imaging for the Radixact System and is gaining positive customer feedback for it.

Zacks Rank and Key Picks

Accuray currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) . While Thermo Fisher currently sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

AngioDynamics reported first-quarter fiscal 2021 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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