Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

TICKERS: ARAY

Accuray Shares Rise on Q2 Earnings, Increased Backlog and Raised FY/20 EBITDA Guidance

Share on Stocktwits

Source:

Shares of Accuray traded 15% higher today after the company reported Q2/20 financial results.

Late yesterday afternoon, radiation oncology company Accuray Inc. (ARAY:NASDAQ), which develops, manufactures and markets radiotherapy systems used in cancer treatments, announced financial results for the second quarter of fiscal year 2020 ended December 31, 2019.

The company reported that gross orders totaled $98.6 million in Q2/20 including 11 orders from China, compared to $100.2 million in Q2/19. The firm indicated that its backlog grew by 12% as of December 31, 2019, to $539.4 million, compared to $482.2 million as of December 31, 20018.

Though gross orders declined, the company advised that net orders in Q2/20 increased by 30% year-over-year to $89.9 million. During the same period, operating expenses decreased by 13% to $34.3 million, compared to $39.2 million in Q2/19.

The firm indicated net income of $10.7 million, or $0.12 per share in Q2/20, compared to a net loss of $4.6 million, or ($0.05) per share for Q2/19. The company stated, "Net income included a non-cash, special gain of $13.0 million related to the value of its capital contribution to the China joint venture in exchange for the company's 49% equity interest in the joint venture."

Joshua H. Levine, president and CEO of Accuray, commented, "Financial and operational results for our second fiscal quarter and for the first half of fiscal year 2020 were solid...Gross orders for the second quarter exceeded our internal expectations heading into the quarter, including a solid order contribution from China. We expect revenue growth to improve in the second half of fiscal 2020 as we believe revenue recognition of China Type A systems will start in our fourth fiscal quarter. In addition, we have confirmed that the tariff exemption for medical linear accelerators is applicable to all of our systems. We believe that this exemption will support our commercial momentum and expand access to our innovative radiation therapy solutions for hospitals and patients in China. In light of recent events with the coronavirus outbreak in China, we do not believe that the outbreak affects the longer-term demand outlook for radiotherapy equipment in China. China remains the world's fastest growing market for radiation oncology systems where we have a highly differentiated strategy to drive significant revenue growth in the coming years."

The company reaffirmed its FY/20 revenue guidance and updated its adjusted FY/20 EBITDA guidance. Total revenue for FY/20 is expected to range between $410 and $420 million, and EBITDA for FY/20 is now expected to range between $21 and $26 million, up from the previously estimated range of $19-24 million.

Accuray, headquartered in Sunnyvale, Calif., is a developer, manufacturer and seller of personalized radiotherapy systems that says it makes cancer treatments more effective, shorter and safer. The company's radiation treatment delivery systems work in conjunction with fully integrated software solutions and cover the full range of radiation therapy and radiosurgery procedures. The firm's products include the CyberKnife precision robotic systems, the TomoTherapy radiation therapy systems and the Radixact delivery treatment platform.

Accuray has a market capitalization of around $335 million with approximately 89 million outstanding shares. ARAY shares opened higher today at $4.40 (+$0.63, +16.71%) over yesterday's $3.77 closing price. The stock has traded today between $4.26 and $4.68 per share and is currently trading at $4.30 (+$0.53, +14.06%).

[NLINSERT]

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.





Want to read more about Life Sciences Tools & Diagnostics and Medical Devices investment ideas?
Get Our Streetwise Reports Life Sciences Report Newsletter Free and be the first to know!

A valid email address is required to subscribe