Accuray (ARAY) Up 1.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Accuray (ARAY). Shares have added about 1.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Accuray due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Accuray Q2 Earnings Lag Estimates, Gross Margin Contracts
Accuray reported loss per share of 10 cents for the second quarter of fiscal 2024, wider than the year-ago period’s loss of 2 cents per share. The metric was also wider than the Zacks Consensus Estimate of a loss of 7 cents per share.
Revenues in Detail
Accuray registered revenues of $107.2 million in the second quarter of fiscal 2024, down 6.6% year over year. The figure, however, topped the Zacks Consensus Estimate by 0.1%.
The overall top-line growth was dampened by lower Products revenues, which was partially offset by an uptick in Service revenues.
At constant exchange rate (CER), net revenues were $106 million, representing an 8% decrease from the prior-year period.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal second quarter, Product revenues declined 18.5% from the year-ago quarter to $51.5 million. This primarily resulted due to shipments of six fewer units year over year.
Services revenues improved 8.2% from the year-ago quarter to $55.7 million. At CER, Services revenues were up 7%. This was primarily driven by an increase in contract revenues and higher installation, training and spare parts volume.
Gross product orders totaled $93.9 million, up 18.8% year over year.
Margin Trend
In the quarter under review, Accuray’s gross profit declined 16.4% to $35.9 million. Gross margin contracted 396 basis points to 33.5%.
Selling and marketing expenses fell 16.4% to $11.4 million. Research and development expenses rose 4.4% year over year to $15.3 million, while general and administrative expenses went up 9.9% year over year to $13.2 million. Total operating expenses of $39.9 million decreased 0.9% year over year.
Operating loss totaled $3.9 million in the fiscal second quarter against the prior-year quarter’s operating profit of $2.7 million.
Financial Position
Accuray exited second-quarter fiscal 2024 with cash and cash equivalents of $72.8 million compared with $76.9 million at the end of the fiscal first quarter.
Total debt (including short-term debt) at the end of second-quarter fiscal 2024 was $174.8 million compared with $176 million at the fiscal first-quarter end.
Guidance
Accuray has provided its revenue outlook for the fiscal third quarter and reiterated its expectations for the metric for fiscal 2024 based on current expectations.
The company expects the third quarter of fiscal 2024 revenues in the range of $112 million-$118 million. The Zacks Consensus Estimate is pegged at $124 million.
Accuray continues to expect its fiscal year revenues to be in the range of $460 million-$470 million, reflecting year-over-year growth of 3-5%. The Zacks Consensus Estimate is pegged at $464.9 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
The consensus estimate has shifted -100% due to these changes.
VGM Scores
Currently, Accuray has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Accuray has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Accuray Incorporated (ARAY) : Free Stock Analysis Report
