Accuray Incorporated ( ARAY Quick Quote ARAY - Free Report) has been gaining on the back of a series of software upgrades and solid global expansion.
In the past three months, shares of Accuray have rallied 77.5% compared with the
industry’s growth of 6.7%.
With a market capitalization of $404.3 million, the company designs, develops, and sells radiosurgery and radiation therapy systems for treatment of tumors in the body. The company has a trailing four-quarter earnings surprise of 66.1%, on average.
Let’s delve deeper into the factors that substantiate Accuray’s Zacks Rank #2 (Buy) at present.
Suite of Software Upgrades: A series of software enhancements is steady a key driver for Accuray. In recent times, management announced the company’s VOLO Optimizer software upgrade for CyberKnife, which reduces treatment time by up to 50% allowing CyberKnife treatments to be performed in just 15-30 minutes. In the first quarter of fiscal 2021, CyberKnife accounted for approximately 15% of the total revenue unit volume.
In September 2020, management announced that the leading hospitals in Japan are utilizing the Radixact System with the Synchrony Automatic, Real-time Motion Synchronization Technology to offer advanced cancer treatments to more patients. The Synchrony technology will facilitate the hospital teams to treat a wider array of cancer cases more quickly and with minimal side effects to patients.
In October 2020, the company launched the ClearRT Helical kVCTImaging for the Radixact System and has been receiving a positive customer feedback ever since. Of late, the company is benefiting from the Synchrony Motion synchronization and real-time delivery adaptation on the Radixact platform. It is witnessing an improved clinical experience and higher adoption of Synchrony. The introduction of the Synchrony technology on the Radixact platform in combination with its Clear RT imaging upgrade creates a unique and powerful treatment platform.
Global Reach: Accuray is fortifying its foothold globally. With regard to Type A shipments, management expects to see the initial revenue impact on the first half of fiscal 2021. With regard to the Type B segment of the China market, the company continues to progress with a Made-in China product. Revenue conversion related to the first of the China type A licenses will begin from the second quarter of fiscal 2021 and will continue over the next 18 to 24 months.
The company saw solid order growth during the fiscal first quarter in the EMEA and Japan regions. Its joint venture with China Isotope radiation Corp. continues to make a significant progress with the Tianjin China training center, which opened in September.
Which Way Are Estimates Headed?
For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $374.9 million, suggesting a 2.1% dip from the year-ago reported figure. For adjusted earnings per share, the same stands at 1 cent, implying a decline of 66.7% from the year-ago reported number.
Other Key Picks
Some other top-ranked stocks from the broader medical space are
McKesson Corporation ( MCK Quick Quote MCK - Free Report) , DaVita Inc ( DVA Quick Quote DVA - Free Report) and IDEXX Laboratories ( IDXX Quick Quote IDXX - Free Report) , each carrying a Zacks Rank #2, presently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a projected long-term earnings growth rate of 6.6%.
DaVita has a projected long-term earnings growth rate of 18.3%.
IDEXX has an estimated long-term earnings growth rate of 15.8%.
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