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Three Reasons to Retain Accuray (ARAY) Stock in Your Portfolio
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Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued solid demand for its products. The optimism led by the second quarter of fiscal 2024 performance and potential in Precision Treatment Planning System (TPS) are expected to contribute further. However, overdependence on technologies and stiff competition persists.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 5.8% against the 9.3% rise of the industry. The S&P 500 has witnessed 25.4% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $275.7 million. Accuray projects 50% growth for fiscal 2024, in which it expects to maintain its strong performance. The company’s P/S ratio of 0.6 is favorable to the industry’s 3.5.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Product Demand: We are upbeat about Accuray’s products, which have been registering robust customer adoption over the past few months. On the second quarter of fiscal 2024 earnings call in January, management confirmed that the company witnessed a strong global demand for installation. It ended the quarter with year-over-year growth in its global installed base of systems. This was led by the APAC (Asia–Pacific) region, which recorded the milestone of 250 systems installed and remains one of Accuray’s fastest-growing installed base regions.
The same month, Accuray announced that the Providence Swedish Radiosurgery Center in Seattle, WA, is enhancing its cancer treatment capabilities with the purchase of the latest generation CyberKnife S7 System.
Potential in Precision TPS: We are optimistic about the Accuray Precision TPS, which offers an efficient way for clinicians to create high-quality radiation therapy treatment plans for various cases. It includes features such as multi-modality image fusion with a unique deformable image registration algorithm, a comprehensive set of contouring tools, and options for AutoSegmentation auto contouring for specific body areas.
Strong Q2 Results: Accuray’s second-quarter fiscal 2024 performance raises our optimism. It witnessed solid Services revenues. Geographically, Accuray’s performance was strong in EIMEA (Europe, India, the Middle East and Africa) and Japan. Strong year-over-year order growth in the APAC region, with particular strength in China, was also recorded. The expansion in the global installed base bodes well.
Downsides
Stiff Competition: The medical device industry in general, and the non-invasive cancer treatment field in particular, are subject to intense and increasing competition and rapidly evolving technologies. To compete successfully, Accuray will need to continue to demonstrate the advantages of its products and technologies over well-established alternative procedures and other counterparts and convince physicians and other healthcare decision makers of the advantages of the same.
Overdependence on Technologies: Achieving consumer and third-party payor acceptance of the CyberKnife and TomoTherapy platforms as preferred methods of tumor treatment is crucial to Accuray’s continued success. The possibility of Accuray’s products not gaining significant market acceptance among consumers and healthcare payors despite substantial time and expenses being spent on their education can weigh on the company’s performance.
Estimate Trend
Accuray has been witnessing a positive estimate revision trend for fiscal 2024. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved from a loss of 7 cents per share to a loss of 5 cents per share.
The Zacks Consensus Estimate for third-quarter fiscal 2024 revenues is pegged at $114.6 million, suggesting a 2.9% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 47.1% compared with the industry’s 11.6% rise in the past year.
Cardinal Health, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 15.9%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average being 15.6%.
Cardinal Health has gained 33.6% compared with the industry’s 11.3% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.5%.
Integer Holdings’ shares have rallied 34.9% compared with the industry’s 9.3% rise in the past year.
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Three Reasons to Retain Accuray (ARAY) Stock in Your Portfolio
Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued solid demand for its products. The optimism led by the second quarter of fiscal 2024 performance and potential in Precision Treatment Planning System (TPS) are expected to contribute further. However, overdependence on technologies and stiff competition persists.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 5.8% against the 9.3% rise of the industry. The S&P 500 has witnessed 25.4% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $275.7 million. Accuray projects 50% growth for fiscal 2024, in which it expects to maintain its strong performance. The company’s P/S ratio of 0.6 is favorable to the industry’s 3.5.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Product Demand: We are upbeat about Accuray’s products, which have been registering robust customer adoption over the past few months. On the second quarter of fiscal 2024 earnings call in January, management confirmed that the company witnessed a strong global demand for installation. It ended the quarter with year-over-year growth in its global installed base of systems. This was led by the APAC (Asia–Pacific) region, which recorded the milestone of 250 systems installed and remains one of Accuray’s fastest-growing installed base regions.
The same month, Accuray announced that the Providence Swedish Radiosurgery Center in Seattle, WA, is enhancing its cancer treatment capabilities with the purchase of the latest generation CyberKnife S7 System.
Potential in Precision TPS: We are optimistic about the Accuray Precision TPS, which offers an efficient way for clinicians to create high-quality radiation therapy treatment plans for various cases. It includes features such as multi-modality image fusion with a unique deformable image registration algorithm, a comprehensive set of contouring tools, and options for AutoSegmentation auto contouring for specific body areas.
Strong Q2 Results: Accuray’s second-quarter fiscal 2024 performance raises our optimism. It witnessed solid Services revenues. Geographically, Accuray’s performance was strong in EIMEA (Europe, India, the Middle East and Africa) and Japan. Strong year-over-year order growth in the APAC region, with particular strength in China, was also recorded. The expansion in the global installed base bodes well.
Downsides
Stiff Competition: The medical device industry in general, and the non-invasive cancer treatment field in particular, are subject to intense and increasing competition and rapidly evolving technologies. To compete successfully, Accuray will need to continue to demonstrate the advantages of its products and technologies over well-established alternative procedures and other counterparts and convince physicians and other healthcare decision makers of the advantages of the same.
Overdependence on Technologies: Achieving consumer and third-party payor acceptance of the CyberKnife and TomoTherapy platforms as preferred methods of tumor treatment is crucial to Accuray’s continued success. The possibility of Accuray’s products not gaining significant market acceptance among consumers and healthcare payors despite substantial time and expenses being spent on their education can weigh on the company’s performance.
Estimate Trend
Accuray has been witnessing a positive estimate revision trend for fiscal 2024. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved from a loss of 7 cents per share to a loss of 5 cents per share.
The Zacks Consensus Estimate for third-quarter fiscal 2024 revenues is pegged at $114.6 million, suggesting a 2.9% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 47.1% compared with the industry’s 11.6% rise in the past year.
Cardinal Health, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 15.9%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average being 15.6%.
Cardinal Health has gained 33.6% compared with the industry’s 11.3% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.5%.
Integer Holdings’ shares have rallied 34.9% compared with the industry’s 9.3% rise in the past year.