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Here's Why You Should Sell Accuray (ARAY) Stock Right Now
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Accuray Inc. (ARAY - Free Report) underperformed its industry in the last three months. The company’s shares have lost 22.1%, wider than the industry’s fall of 14.4%. The current return also compares unfavorably with the S&P 500 index’s rise of 0.3%. Regulatory issues regarding Onrad, intense competition in the radiation oncology market, sluggish macro economic conditions and unfavorable foreign exchange rate are significant challenges for the company.
The Zacks Consensus Estimate for 2018 bottom line is pegged at a loss of 29 cents. Notably, this has widened by 10 cents in the last two months. The Zacks Consensus Estimate for the current quarter is pegged at a loss of 2 cents.
The stock has a Zacks Rank #4 (Sell). Here we take a peek at the major issues plaguing Accuray.
Onrad is Accuray’s flagship product for the value segment of the MedTech market. In fact, the company has been trying to build a solid sales channel for this important segment since long.
However, the order uptake for Onrad is somewhat dampened by lack of regulatory movement in China recently. The company has been facing headwinds in the orders perspective due to continued Class A license delay in the region.
By the end of the third quarter of fiscal 2018, Accuray announced that its distributors have been working hard to position Onrad in the value segment within a year.
Cutthroat Competition in the Niche Markets
Accuray is exposed to significant competition in the radiation oncology market, which is characterized by rapid technological changes.
The company competes head-to-head with Varian Medical Systems, Inc , Elekta AB, Mitsubishi Heavy Industries, ViewRay and BrainLAB AG in the market. The CyberKnife System faces stiff challenge from Varian Medical’s Trilogysystem, while TomoTherapy systems face competition from the RapidArc technology and the TrueBeam systems.
Forex Woes
As percentage of total sales, international sales have increased significantly over the last five years. Accuray’s significant international presence augments its customer base. However, fluctuations in currency exchange rates, particularly with a strong dollar, will continue to adversely impact the company’s backlog and top-line growth in 2018 and further.
Key Picks
A few better-ranked stocks in the broader medical space are Abiomed, Inc , Genomic Health, Inc and Varian Medical.
Genomic Health has an expected growth rate of 187.5% and flaunts a Zacks Rank of 1.
Varian Medical has a projected long-term growth rate of 8%. The stock carries a Zacks Rank #2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Sell Accuray (ARAY) Stock Right Now
Accuray Inc. (ARAY - Free Report) underperformed its industry in the last three months. The company’s shares have lost 22.1%, wider than the industry’s fall of 14.4%. The current return also compares unfavorably with the S&P 500 index’s rise of 0.3%. Regulatory issues regarding Onrad, intense competition in the radiation oncology market, sluggish macro economic conditions and unfavorable foreign exchange rate are significant challenges for the company.
The Zacks Consensus Estimate for 2018 bottom line is pegged at a loss of 29 cents. Notably, this has widened by 10 cents in the last two months. The Zacks Consensus Estimate for the current quarter is pegged at a loss of 2 cents.
The stock has a Zacks Rank #4 (Sell). Here we take a peek at the major issues plaguing Accuray.
Accuray Incorporated Price and Consensus
Accuray Incorporated Price and Consensus | Accuray Incorporated Quote
Issues Regarding Onrad
Onrad is Accuray’s flagship product for the value segment of the MedTech market. In fact, the company has been trying to build a solid sales channel for this important segment since long.
However, the order uptake for Onrad is somewhat dampened by lack of regulatory movement in China recently. The company has been facing headwinds in the orders perspective due to continued Class A license delay in the region.
By the end of the third quarter of fiscal 2018, Accuray announced that its distributors have been working hard to position Onrad in the value segment within a year.
Cutthroat Competition in the Niche Markets
Accuray is exposed to significant competition in the radiation oncology market, which is characterized by rapid technological changes.
The company competes head-to-head with Varian Medical Systems, Inc , Elekta AB, Mitsubishi Heavy Industries, ViewRay and BrainLAB AG in the market. The CyberKnife System faces stiff challenge from Varian Medical’s Trilogysystem, while TomoTherapy systems face competition from the RapidArc technology and the TrueBeam systems.
Forex Woes
As percentage of total sales, international sales have increased significantly over the last five years. Accuray’s significant international presence augments its customer base. However, fluctuations in currency exchange rates, particularly with a strong dollar, will continue to adversely impact the company’s backlog and top-line growth in 2018 and further.
Key Picks
A few better-ranked stocks in the broader medical space are Abiomed, Inc , Genomic Health, Inc and Varian Medical.
Abiomed has a long-term growth rate of 27%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health has an expected growth rate of 187.5% and flaunts a Zacks Rank of 1.
Varian Medical has a projected long-term growth rate of 8%. The stock carries a Zacks Rank #2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>