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 Stock in Your Portfolio Now
Read MoreHide Full Article
Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued robust demand for its products. The optimism, led by robust international performance in fourth-quarter fiscal 2024 performance and potential in the Precision Treatment Planning System (TPS) and Radiosurgery Market, is expected to contribute further. However, reimbursement uncertainties and stiff competition are concerning.
This Zacks Rank #3 (Hold) company has lost 23% in the year-to-date period against 9.2% growth of the industry. The S&P 500 has witnessed 17.8% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $217.4 million. Accuray projects 93.8% growth for fiscal 2025 and expects to maintain its strong performance going forward. The company has a P/S ratio of 0.5 compared with the industry’s 4.6.
Image Source: Zacks Investment Research
Reasons Favoring Accuray’s Growth
Potential in Precision TPS: We are optimistic about the Accuray Precision TPS, which offers an efficient way for clinicians to create high-quality radiation therapy treatment plans for various cases. It includes features such as multi-modality image fusion with a unique deformable image registration algorithm, a comprehensive set of contouring tools and options for AutoSegmentation auto contouring for specific body areas.
In June, Accuray announced that the registration dossier for the Accuray Precision TPS had been approved by the Chinese National Medical Products Administration. The Accuray Precision TPS is now available for use with the CNNC-Accuray joint venture Tomo C radiation therapy system.
Potential in Radiosurgery Market: Accuray’s CyberKnife System is a robotic radiosurgery system capable of treating tumors throughout the body. There is an extensive body of published literature supporting the use of the CyberKnife System in the treatment of various targets, including cancers, benign tumors, or functional diseases. With more than two decades of clinical evidence, the CyberKnife System offers distinct advantages in the treatment of diseases in the head, base of the skull, and spine.
During the fiscal fourth quarter, management commented on the strong customer adoption of the CyberKnife system. The company witnessed 31% year-over-year growth in CyberKnife system orders. Per management, the rapidly growing clinical trends toward shorter courses of the latest treatments from one to five sessions, backed by clinical data over the long term for areas like prostate, lung, and neuro treatments, is driving the increase in CyberKnife system demand.
Robust Product Demand: Accuray’s products have been registering robust customer adoption over the past few months. During the fiscal fourth quarter, Accuray implemented the first installations of the VitalHold surface-guided radiation therapy (SGRT) on the Radixact System in Japan. In September, Accuray announced that Gifu Prefectural General Medical Center is setting a new standard in cancer care in Japan as the first hospital in the country to treat patients with SGRT using the company's Radixact Radiation Delivery System and VitalHold package.
In August, Accuray announced that Halifax Health in Florida is the first in the United States to treat cancer patients using the Accuray Radixact Radiation Delivery System and VitalHold Technology.
In June, Accuray announced today that long-term customer Heidelberg University Hospital in Heidelberg, Germany, has selected the company's Radixact System, equipped with its proprietary ClearRT, Synchrony and VOLO Ultra Optimizer solutions, to help transform its approach to cancer care.
Strong Revenue Growth: Per management, Product revenues contributed materially to growth in the fiscal fourth quarter, up approximately 28% year over year. The growth was driven by strong demand in China where product revenues grew 55% and orders increased 80% compared with the prior year. On the fourth quarter of fiscal 2024 earnings call in August, management commented that its EIMEA (Europe, India, the Middle East and Africa) region’s product revenues increased 27%. Per Accuray, the Latin America region witnessed order growth of more than 400% in the fiscal fourth quarter.
On the fiscal fourth-quarter earnings call, management announced that it had received CE Mark for Accuray Helix, a CT-guided helical radiotherapy system designed to provide high performance and high throughput. Management also confirmed that it is continuing with early market launch efforts for Helix (Accuray’s non-China access product) first in India.
Factors That May Offset the Gains for ARAY
Tough Competition: Rapid technological advancements and strong competition characterize the medical device sector in general and the non-invasive cancer treatment sector in particular.
Accuray needs to convince physicians and other healthcare decision-makers about the benefits of its products and technology. To compete successfully, the company has to highlight the advantages of its products over other well-established alternatives.
Reimbursement Uncertainties: Accuray’s customers rely significantly on reimbursement from public and private third-party payors for the CyberKnife and TomoTherapy platform procedures. The company’s ability to commercialize its products successfully and increase market acceptance of the same will significantly depend on the extent to which public and private third-party payors provide adequate coverage and reimbursement for procedures that are performed with Accuray’s products and the extent to which patients who are treated by its products continue to be covered by health insurance. Third-party payors may establish or change the reimbursement for medical products and services that could significantly influence the purchase of the same.
Estimate Trend
Accuray has been witnessing a stable estimate revision trend for fiscal 2025. Over the past seven days, the Zacks Consensus Estimate for earnings has remained stable at a loss of 1 cent per share.
The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is pegged at $98.1 million, suggesting a 5.6% decline from the year-ago reported number.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 56.1% compared with the industry's 48.1% rise so far this year.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Retain Accuray Stock in Your Portfolio Now
Accuray Incorporated (ARAY - Free Report) is well-poised for growth in the coming quarters, courtesy of continued robust demand for its products. The optimism, led by robust international performance in fourth-quarter fiscal 2024 performance and potential in the Precision Treatment Planning System (TPS) and Radiosurgery Market, is expected to contribute further. However, reimbursement uncertainties and stiff competition are concerning.
This Zacks Rank #3 (Hold) company has lost 23% in the year-to-date period against 9.2% growth of the industry. The S&P 500 has witnessed 17.8% growth in the said time frame.
The renowned radiation oncology company has a market capitalization of $217.4 million. Accuray projects 93.8% growth for fiscal 2025 and expects to maintain its strong performance going forward. The company has a P/S ratio of 0.5 compared with the industry’s 4.6.
Image Source: Zacks Investment Research
Reasons Favoring Accuray’s Growth
Potential in Precision TPS: We are optimistic about the Accuray Precision TPS, which offers an efficient way for clinicians to create high-quality radiation therapy treatment plans for various cases. It includes features such as multi-modality image fusion with a unique deformable image registration algorithm, a comprehensive set of contouring tools and options for AutoSegmentation auto contouring for specific body areas.
In June, Accuray announced that the registration dossier for the Accuray Precision TPS had been approved by the Chinese National Medical Products Administration. The Accuray Precision TPS is now available for use with the CNNC-Accuray joint venture Tomo C radiation therapy system.
Potential in Radiosurgery Market: Accuray’s CyberKnife System is a robotic radiosurgery system capable of treating tumors throughout the body. There is an extensive body of published literature supporting the use of the CyberKnife System in the treatment of various targets, including cancers, benign tumors, or functional diseases. With more than two decades of clinical evidence, the CyberKnife System offers distinct advantages in the treatment of diseases in the head, base of the skull, and spine.
During the fiscal fourth quarter, management commented on the strong customer adoption of the CyberKnife system. The company witnessed 31% year-over-year growth in CyberKnife system orders. Per management, the rapidly growing clinical trends toward shorter courses of the latest treatments from one to five sessions, backed by clinical data over the long term for areas like prostate, lung, and neuro treatments, is driving the increase in CyberKnife system demand.
Robust Product Demand: Accuray’s products have been registering robust customer adoption over the past few months. During the fiscal fourth quarter, Accuray implemented the first installations of the VitalHold surface-guided radiation therapy (SGRT) on the Radixact System in Japan. In September, Accuray announced that Gifu Prefectural General Medical Center is setting a new standard in cancer care in Japan as the first hospital in the country to treat patients with SGRT using the company's Radixact Radiation Delivery System and VitalHold package.
In August, Accuray announced that Halifax Health in Florida is the first in the United States to treat cancer patients using the Accuray Radixact Radiation Delivery System and VitalHold Technology.
In June, Accuray announced today that long-term customer Heidelberg University Hospital in Heidelberg, Germany, has selected the company's Radixact System, equipped with its proprietary ClearRT, Synchrony and VOLO Ultra Optimizer solutions, to help transform its approach to cancer care.
Strong Revenue Growth: Per management, Product revenues contributed materially to growth in the fiscal fourth quarter, up approximately 28% year over year. The growth was driven by strong demand in China where product revenues grew 55% and orders increased 80% compared with the prior year. On the fourth quarter of fiscal 2024 earnings call in August, management commented that its EIMEA (Europe, India, the Middle East and Africa) region’s product revenues increased 27%. Per Accuray, the Latin America region witnessed order growth of more than 400% in the fiscal fourth quarter.
On the fiscal fourth-quarter earnings call, management announced that it had received CE Mark for Accuray Helix, a CT-guided helical radiotherapy system designed to provide high performance and high throughput. Management also confirmed that it is continuing with early market launch efforts for Helix (Accuray’s non-China access product) first in India.
Factors That May Offset the Gains for ARAY
Tough Competition: Rapid technological advancements and strong competition characterize the medical device sector in general and the non-invasive cancer treatment sector in particular.
Accuray needs to convince physicians and other healthcare decision-makers about the benefits of its products and technology. To compete successfully, the company has to highlight the advantages of its products over other well-established alternatives.
Reimbursement Uncertainties: Accuray’s customers rely significantly on reimbursement from public and private third-party payors for the CyberKnife and TomoTherapy platform procedures. The company’s ability to commercialize its products successfully and increase market acceptance of the same will significantly depend on the extent to which public and private third-party payors provide adequate coverage and reimbursement for procedures that are performed with Accuray’s products and the extent to which patients who are treated by its products continue to be covered by health insurance. Third-party payors may establish or change the reimbursement for medical products and services that could significantly influence the purchase of the same.
Estimate Trend
Accuray has been witnessing a stable estimate revision trend for fiscal 2025. Over the past seven days, the Zacks Consensus Estimate for earnings has remained stable at a loss of 1 cent per share.
The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is pegged at $98.1 million, suggesting a 5.6% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 56.1% compared with the industry's 48.1% rise so far this year.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.