It has been about a month since the last earnings report for Accuray (ARAY Quick QuoteARAY - Free Report) . Shares have lost about 3.4% 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 drivers.

Accuray Posts In-Line Q4 Earnings, Beats on Revenues

Accuray 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.

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

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted 75% due to these changes.

VGM Scores

Currently, Accuray has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 looks promising. It's no surprise Accuray has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.