Accuray Inc. (ARAY) is a medical device company specializing in customized treatment solutions for radiosurgery, intensity-modulated radiation therapy, image-guided radiation therapy, and stereotactic body radiation therapy. The company aims to improve cancer treatment by making it shorter, safer, smarter, and more effective.
Founded in 1990, Accuray has expanded its operations beyond the U.S. to serve markets in Canada, Latin America, New Zealand, Australia, Europe, the Middle East, India, China, and the Asia-Pacific region. Despite its market cap of $176 million, Accuray stock has seen a significant decline of over 37% this year, underperforming the broader market. Shares of the penny stock, currently trading below $2 each, dropped 29% in a single session following the release of its fiscal Q3 results.
In the third quarter, Accuray reported a loss of $6.3 million, or $0.06 per share, compared to a profit of $0.01 per share in the previous year. Revenue also decreased by 14.3% year over year to $101.1 million, falling short of the estimated $113.65 million. Despite these challenges, gross orders improved by 21% to $89.1 million, and the book to bill ratio rose to 1.8 from 1.2 in the prior year.
Looking ahead, management provided guidance for FY 2024, expecting full-year revenue between $432 million and $437 million, with adjusted EBITDA ranging from $19 million to $22 million.
Following the earnings disappointment, Accuray Board Chair Joseph E. Whitters purchased 100k shares of the company at $1.56 each, totaling $156,050. This significant insider buying is the largest since 2014 and the first insider purchase since 2022. Analysts maintain a unanimous “Strong Buy” rating on ARAY, with a mean price target of $6.33, indicating an upside potential of 255.6% from current levels.
Roth MKM analysts reaffirmed a “Buy” rating on ARAY post-earnings, lowering their price target to a Street-high of $7. The firm believes that the recent earnings miss was due to delayed system approvals. Please note that the information in this article is for informational purposes only, and the author does not hold any positions in the securities mentioned.