It has been about a month since the last earnings report for Accuray (ARAY). Shares have lost about 16.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Accuray due for a breakout? 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 drivers.
Accuray Reports Loss in Q4, Revenues Miss Estimates
Accuray Incorporated reported fourth-quarter fiscal 2020 loss per share of a penny against the Zacks Consensus Estimate of earnings per share of 2 cents. Also, the company had reported a loss of 2 cents per share a year ago.
For fiscal 2020, the company reported earnings per share of 3 cents against the Zacks Consensus Estimate of a loss of 9 cents. The company had reported a loss of 19 cents per share a year ago.
For the fiscal fourth quarter, net revenues totaled $95 million, missing the Zacks Consensus Estimate of $99 million by 4%. On a year-over-year basis, revenues fell 19.1%.
For the fiscal year, net revenues came in at $382.9 million, missing Zacks Consensus Estimate by 1.2%. On a year-over-year basis, revenues fell 8.6%.
Fiscal Q4 Details
Product Revenues: Product revenues fell 33.3% year over year to $40.4 million in the reported quarter.
Service Revenues: Service revenues totaled $54.6 million, down 3.9% from the year-ago quarter.
Gross Order Update: Gross orders in the fiscal fourth quarter totaled $94.3 million, down 2.9% year over year.
Gross profit in the fiscal fourth quarter totaled $39.9 million, down 13.1% on a year-over-year basis. Gross margin was 42%, highlighting an expansion of 289 basis points (bps) year over year.
Fourth-quarter operating profit was $4.6 million, up 39.8%. Operating margin came in at 4.8%, highlighting an expansion of 202 bps.
The company exited fourth-quarter fiscal 2020 with total cash, cash equivalents, and short-term restricted cash of $108.6 million, compared with $91.6 million at the end of the fiscal third quarter.
Considering the continued progression of the COVID-19 pandemic and the uncertainty of its impact on the global economy and the healthcare industry, Accuray has decided not to issue the financial guidance for 2021 with respect to revenues and adjusted EBITDA.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -283.33% due to these changes.
Currently, Accuray has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, 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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