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Accuray (ARAY) Posts In-Line Q4 Earnings, Beats on Revenues

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Accuray Incorporated (ARAY - Free Report) reported adjusted loss per share of a penny for the fourth quarter of fiscal 2021, flat year over year. Adjusted loss per share was also in line with the Zacks Consensus Estimate.

GAAP loss per share was 12 cents against the prior-year quarter’s break-even earnings per share (“EPS”).

Full-year GAAP loss per share was 7 cents against the year-ago period’s EPS of 4 cents.

Revenues in Detail

Accuray registered revenues of $110.9 million in the fiscal 2021 fourth quarter, up 16.8% year over year. The figure surpassed the Zacks Consensus Estimate by 9.1%.

Strength in Product revenues drove the overall top line in the quarter.

Full-year revenues were $396.3 million, reflecting a 3.5% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 2.3%.

Segmental Details

Accuray derives revenues from two sources — Product and Services.

In the fiscal fourth quarter, Product revenues improved 38.9% from the year-ago quarter to $56.1 million.

Services revenues improved 0.4% from the year-ago quarter to $54.6 million.

Gross orders totaled $112.7 million, up 19.5% year over year.

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated Price, Consensus and EPS Surprise

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

Margin Trend

In the quarter under review, Accuray’s gross profit rose 10% to $43.7 million. Gross margin contracted 243 basis points (bps) to 39.4%.

Selling and marketing expenses rose 12.6% to $13 million. Research and development expenses went up 25.7% year over year to $15.4 million while general and administrative expenses went up 4.4% year over year to $11.2 million. Total operating expenses of $39.6 million increased 14.7% year over year.

Total operating profit totaled $4.1 million, reflecting a 20.8% decline from the prior-year quarter.

Financial Position

Accuray exited fiscal year 2021 with cash and cash equivalents of $116.4 million compared with $107.6 million at the end of fiscal 2020. Total debt (including short-term debt) at the end of fiscal 2021 was $173.8 million compared with $189.3 million at the end of fiscal 2020.

2022 Guidance

Accuray has initiated its financial outlook for fiscal year 2022.

The company expects its total revenues for the year in the range of $410-$420 million, representing growth at the midpoint of the range of 5% from comparable figure in fiscal 2021. The Zacks Consensus Estimate for the same is currently pegged at $420 million, which matches the upper end of the company-provided guidance.

Our Take

Accuray exited the fiscal fourth quarter of 2021 with better-than-expected revenues and in-line loss per share. The company registered uptick in both its overall top line and its revenue sources during the period, which is impressive. Successful commercial launch of high-impact technology upgrades like ClearRT Helical kVCT Imaging for the Radixact System buoys optimism on the stock. Receipt of CE Mark certification for ClearRT Helical kVCT Imaging for the Radixact System also augurs well. Robust product adoption boosts our confidence on the stock.

However, year-over-year loss per share is worrying. Contraction of gross margin also does not bode well.

Zacks Rank and Key Picks

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

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Encompass Health Corporation (EHC - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .

Encompass Health, sporting a Zacks Rank #1 (Strong Buy), reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2 (Buy).

Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million surpassed the Zacks Consensus Estimate by 17.3%. It currently carries a Zacks Rank #2.