We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Accuray in Your Portfolio
Read MoreHide Full Article
Accuray, Inc. (ARAY - Free Report) is gaining on progress with its suite of software upgrades and acquisitions. However, a competitive environment has been offsetting the positives to some extent.
The company, with a market capitalization of $160.1 million, is the leading designer, developer and seller of radiosurgery and radiation therapy systems for the treatment of tumors. The company anticipates earnings improvement of 150% for the fourth quarter of fiscal 2020. This Zacks Rank #3 (Hold) company has a trailing four-quarter positive earnings surprise of 3.2%, on average.
In the past three months, the stock has lost 51.6% compared with 7.2% decline of its industry.
Let’s delve deeper into the factors working in favor of the company.
Suite of Software Upgrades: A series of software upgrades have been propelling growth for Accuray.
Recently, the company launched an imaging software for Radixact. Per management, this software offers significant improvement in soft tissue resolution with up to 50% lesser image noise than the previous version. Another important development program for Radixact System is the launch of intra-fraction motion tracking and correction capability. It is encouraging to note that Accuray recently received FDA approval for its 510(k)-application motion synchronization on the Radixact treatment system.
Acquisitions: The acquisitions of TomoTherapy and Morphormics have helped Accuray expand product offerings and capabilities. The collaboration with Christie InnoMed will help the company’s products gain better visibility in Canada.
The partnerships with Premier and Amerinet are expected to help the company gain significant penetration in hospitals and oncology centers. Further, these will aid in expanding the company’s GPO (Group Purchasing Organization) strategic accounts contract portfolio. Accuray’s strategy of pursuing partnerships with GPOs will drive customer base, thereby improving top-line growth in the long run.
However, there is a concerning factor marring growth.
Cutthroat Competition in Niche Markets: Accuray is exposed to stiff competition in the radiation oncology market, which is characterized by rapid technological changes.
The company competes with Varian Medical, Elekta AB, Mitsubishi Heavy Industries, ViewRay and BrainLAB AG in this market. The CyberKnife System faces stiff challenge from Varian’s Trilogy system, while TomoTherapy systems are facing competitive threat from Varian’s RapidArc technology and the TrueBeam systems.
Estimates Trend
Over the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2020 earnings has declined 33.3% to 2 cents.
The Zacks Consensus Estimate for its third-quarter fiscal 2020 revenues is pegged at $102.5 million, suggesting a 0.7% fall from the year-ago reported number.
DexCom’s long-term earnings growth rate is estimated at 36.7%. The company presently carries a Zacks Rank #2.
Surmodics’ long-term earnings growth rate is estimated at 10%. It currently carries a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
Here's Why You Should Retain Accuray in Your Portfolio
Accuray, Inc. (ARAY - Free Report) is gaining on progress with its suite of software upgrades and acquisitions. However, a competitive environment has been offsetting the positives to some extent.
The company, with a market capitalization of $160.1 million, is the leading designer, developer and seller of radiosurgery and radiation therapy systems for the treatment of tumors. The company anticipates earnings improvement of 150% for the fourth quarter of fiscal 2020. This Zacks Rank #3 (Hold) company has a trailing four-quarter positive earnings surprise of 3.2%, on average.
In the past three months, the stock has lost 51.6% compared with 7.2% decline of its industry.
Let’s delve deeper into the factors working in favor of the company.
Suite of Software Upgrades: A series of software upgrades have been propelling growth for Accuray.
Recently, the company launched an imaging software for Radixact. Per management, this software offers significant improvement in soft tissue resolution with up to 50% lesser image noise than the previous version. Another important development program for Radixact System is the launch of intra-fraction motion tracking and correction capability. It is encouraging to note that Accuray recently received FDA approval for its 510(k)-application motion synchronization on the Radixact treatment system.
Acquisitions: The acquisitions of TomoTherapy and Morphormics have helped Accuray expand product offerings and capabilities. The collaboration with Christie InnoMed will help the company’s products gain better visibility in Canada.
The partnerships with Premier and Amerinet are expected to help the company gain significant penetration in hospitals and oncology centers. Further, these will aid in expanding the company’s GPO (Group Purchasing Organization) strategic accounts contract portfolio. Accuray’s strategy of pursuing partnerships with GPOs will drive customer base, thereby improving top-line growth in the long run.
However, there is a concerning factor marring growth.
Cutthroat Competition in Niche Markets: Accuray is exposed to stiff competition in the radiation oncology market, which is characterized by rapid technological changes.
The company competes with Varian Medical, Elekta AB, Mitsubishi Heavy Industries, ViewRay and BrainLAB AG in this market. The CyberKnife System faces stiff challenge from Varian’s Trilogy system, while TomoTherapy systems are facing competitive threat from Varian’s RapidArc technology and the TrueBeam systems.
Estimates Trend
Over the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2020 earnings has declined 33.3% to 2 cents.
The Zacks Consensus Estimate for its third-quarter fiscal 2020 revenues is pegged at $102.5 million, suggesting a 0.7% fall from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are ResMed Inc. (RMD - Free Report) , DexCom (DXCM - Free Report) and Surmodics (SRDX - Free Report) .
ResMed has a projected long-term earnings growth rate of 12%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom’s long-term earnings growth rate is estimated at 36.7%. The company presently carries a Zacks Rank #2.
Surmodics’ long-term earnings growth rate is estimated at 10%. It currently carries a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>