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Accuray (ARAY) Down 13.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Accuray (ARAY - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Accuray due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Accuray Posts Breakeven Q3 Earnings, Beats on Revenues

Accuray Incorporated  reported breakeven earnings per share for third-quarter fiscal 2021. The Zacks Consensus Estimate was earnings per share of 1 cent. The company’s EPS was 3 cents  in the year-ago quarter.

Revenue Details

For the fiscal third quarter, net revenues totaled $102.6 million, beating the Zacks Consensus Estimate by 3%.On a year-over-year basis, the top line also inched up 3.1%.

Fiscal Q3 Details

Product Revenues: The metric rose 4.2% year over year to $47.4 million in the reported quarter.

Service Revenues: Revenues of $55.1 million from this segment were up 2% from the year-ago quarter.

Gross Order Update: Gross orders in the fiscal third quarter totaled $87.4 million, up 16% year over year.

Margins

Gross profit in the fiscal third quarter summed $39.5 million, up 1% on a year-over-year basis. Gross margin was 38.6%, highlighting a contraction of 76 basis points (bps) year over year.

Total operating expenses came in at $35.1 million, up 12.7%.

Operating profit for the fiscal third quarter was $4.4 million, down 44.5%. Operating margin came in at 4.3%, contracting 369 bps.

Cash Position

The company exited third-quarter fiscal 2021 with total cash and cash equivalents of $126.3 million compared with $39.5 million at the end of the second quarter of fiscal 2021.

2021 Guidance

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

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -100% due to these changes.

VGM Scores

At this time, Accuray has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Accuray has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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