Radiosurgery systems maker Accuray Incorporated (ARAY) announced that more than half a million cancer patients across the globe have been treated with its flagship CyberKnife and TomoTherapy systems. To date, more than 700 systems have been sold by the company across 40 countries.
This news failed to boost ARAY’s shares immediately as the company had already announced that in its last reported quarter it has installed a total of 706 units. However, we note that shares of this company have risen 19.1% ever since it reported its first-quarter fiscal 2014 results on Nov 7.
Management asserts that widespread adoption of Accuray’s latest offerings is an indication of the company’s ability to grow in the long run. Two of the new products which are garnering healthy attraction in the global oncology community are the CyberKnife M6 Series and the TomoTherapy H Series.
Currently, Accuray has a Zacks Rank #4 (Sell). The company’s first-quarter fiscal 2014 loss of 21 cents per share was wider than the Zacks Consensus Estimate of a loss of 19 cents per share. Revenues of this radiosurgery systems maker dropped 7% to $76.6 million due to continued fall in product sales. The top line also missed the Zacks Consensus Estimate of $83 million.
Despite the revenue miss, a 17% year-over-year growth in gross orders to $63.4 million was the highlight of the quarter. Accuray added net new system orders worth $60.1 million, leading to a total system backlog of $347.8 million, up 18% year over year. The company shipped 13 and installed 14 new CyberKnife and TomoTherapy systems during the quarter.
Moreover, on an encouraging note, the California-based company reiterated its revenue outlook for fiscal 2014. Revenues are expected in the range of $325 to $345 million for the fiscal year.
While we choose to avoid Accuray at present, some better-ranked stocks in the medical instruments sector include Natus Medical Inc. (BABY), AngioDynamics, Inc. (ANGO) and CryoLife Inc. (CRY). While Natus carries a Zacks Rank #1 (Strong Buy), AngioDynamics and CryoLife hold a Zacks Rank #2 (Buy).