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Why Is Accuray (ARAY) Up 2.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Accuray (ARAY - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Accuray due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Accuray Q2 Earnings Miss Estimates, Margins Down
Accuray reported breakeven adjusted earnings per share for the second quarter of fiscal 2022 compared with year-over-year earnings per share of 5 cents. Adjusted earnings per share lagged the Zacks Consensus Estimate of earnings of 2 cents per share.
GAAP earnings per share was also at break-even level against the prior-year quarter’s earnings per share of 5 cents.
Revenues in Detail
Accuray registered revenues of $116.3 million in the fiscal 2022 second quarter, up 19.3% year over year. The figure surpassed the Zacks Consensus Estimate by 10.8%.
Strength in Product revenues and robust year-over-year growth in Americas and EMEA drove the overall top line in the quarter.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal second quarter, Product revenues improved 45.2% from the year-ago quarter to $60.7 million. CyberKnife accounted for around 21% of revenue unit volume in the quarter whereas the TomoTherapy platform accounted for the remaining 79%.
Services revenues dipped 0.2% from the year-ago quarter to $55.6 million.
Gross orders totaled $85.4 million, up 13.3% year over year.
Margin Trend
In the quarter under review, Accuray’s gross profit rose 4.4% to $42.6 million. Gross margin contracted 524 basis points (bps) to 36.7%.
Selling and marketing expenses rose 27.9% to $13.2 million. Research and development expenses went up 22.9% year over year to $14.7 million, while general and administrative expenses went up 3.8% year over year to $10.7 million. Total operating expenses of $38.6 million increased 18.4% year over year.
Total operating profit was $3.9 million, reflecting a 51.4% decline from the prior-year quarter. Operating margin in the quarter contracted 499 bps to 3.4%.
Financial Position
Accuray exited the second quarter of fiscal 2022 with cash, cash equivalents, and short-term restricted cash of $123.2 million compared with $104.7 million at the end of fiscal first quarter. Total debt (including short-term debt) at the end of fiscal 2022 second quarter was $182 million compared with $197.8 million at the end of fiscal first quarter.
2022 Guidance
Accuray has revised its financial outlook for fiscal 2022 based on current expectations.
The company now expects its fiscal year revenues to be $420-$430 million, wider from its earlier projection of $420-$427 million. The Zacks Consensus Estimate for the same is pegged at $425.6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -300% due to these changes.
VGM Scores
At this time, Accuray has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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 indicates a downward shift. It's no surprise Accuray has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Accuray (ARAY) Up 2.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Accuray (ARAY - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Accuray due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Accuray Q2 Earnings Miss Estimates, Margins Down
Accuray reported breakeven adjusted earnings per share for the second quarter of fiscal 2022 compared with year-over-year earnings per share of 5 cents. Adjusted earnings per share lagged the Zacks Consensus Estimate of earnings of 2 cents per share.
GAAP earnings per share was also at break-even level against the prior-year quarter’s earnings per share of 5 cents.
Revenues in Detail
Accuray registered revenues of $116.3 million in the fiscal 2022 second quarter, up 19.3% year over year. The figure surpassed the Zacks Consensus Estimate by 10.8%.
Strength in Product revenues and robust year-over-year growth in Americas and EMEA drove the overall top line in the quarter.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal second quarter, Product revenues improved 45.2% from the year-ago quarter to $60.7 million. CyberKnife accounted for around 21% of revenue unit volume in the quarter whereas the TomoTherapy platform accounted for the remaining 79%.
Services revenues dipped 0.2% from the year-ago quarter to $55.6 million.
Gross orders totaled $85.4 million, up 13.3% year over year.
Margin Trend
In the quarter under review, Accuray’s gross profit rose 4.4% to $42.6 million. Gross margin contracted 524 basis points (bps) to 36.7%.
Selling and marketing expenses rose 27.9% to $13.2 million. Research and development expenses went up 22.9% year over year to $14.7 million, while general and administrative expenses went up 3.8% year over year to $10.7 million. Total operating expenses of $38.6 million increased 18.4% year over year.
Total operating profit was $3.9 million, reflecting a 51.4% decline from the prior-year quarter. Operating margin in the quarter contracted 499 bps to 3.4%.
Financial Position
Accuray exited the second quarter of fiscal 2022 with cash, cash equivalents, and short-term restricted cash of $123.2 million compared with $104.7 million at the end of fiscal first quarter. Total debt (including short-term debt) at the end of fiscal 2022 second quarter was $182 million compared with $197.8 million at the end of fiscal first quarter.
2022 Guidance
Accuray has revised its financial outlook for fiscal 2022 based on current expectations.
The company now expects its fiscal year revenues to be $420-$430 million, wider from its earlier projection of $420-$427 million. The Zacks Consensus Estimate for the same is pegged at $425.6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -300% due to these changes.
VGM Scores
At this time, Accuray has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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 indicates a downward shift. It's no surprise Accuray has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.