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Here's Why You Should Add Accuray to Your Portfolio Now

Zacks Equity Research
·4-min read

Accuray Incorporated ARAY is gaining on progress in its suite of software upgrades and acquisitions. The launch of the precision system and IBMS Data Management system for TomoTherapy has been a key growth driver.

The company, with a market capitalization of $190.1 million, is the leading designer, developer and seller of radiosurgery and radiation therapy systems for the treatment of tumors. The company's earnings are anticipated to improve 200% in the fourth quarter of fiscal 2020. This Zacks Rank #2 (Buy) company has a trailing four-quarter positive earnings surprise of 34.4%, on average.

Since the start of the fiscal fourth quarter, the stock has gained 10.6% compared with  24.3% rise of its industry.

Let’s delve deeper into the factors working in favor of the company.

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Suite of Software Upgrades: A series of  software upgrades have been propelling growth for Accuray.

Recently, the company received FDA approval for its 510(k)-application motion synchronization on the Radixact treatment system.

In February 2020, the company installed the first CyberKnife M6 System in Mercy Hospital, St. Louis Missouri. This next-generation CyberKnife System can deliver accurate stereotactic radiosurgery (SRS) and stereotactic body radiation therapy (SBRT) treatments with ease, thereby enabling the clinical team to expand access to one of the most advanced methods for administering radiation to more cancer patients.

In the fiscal third quarter, CyberKnife accounted for approximately 20% of the company’s revenues.



Acquisitions: The acquisitions of TomoTherapy and Morphormics have helped Accuray expand product offerings and capabilities. The collaboration with Christie InnoMed will help the company’s products gain better visibility in Canada.

The partnerships with Premier and Amerinet are expected to help the company gain significant penetration in hospitals and oncology centers. Further, these will aid in expanding the company’s GPO (Group Purchasing Organization) strategic accounts contract portfolio. Accuray’s strategy of pursuing partnerships with GPOs will drive customer base, thereby improving top-line growth in the long run.

Precision System & IBMS Data Management System for TomoTherapy:

Accuray announced the launch of its precision treatment planning system. The system leverages on the company’s flagship Radixact and CyberKnife system platforms. This will significantly improve treatment speed and overall throughput of the existing CyberKnife system.

Accuray also announced 510(k) clearance for the new IBMS data management system for TomoTherapy. It is a centralized database that shares and makes data accessible between multiple accurate systems, adding flexibility and improving workflow efficiency in the radiation therapy department. Further, studies have proven that CyberKnife provides long-lasting pain relief procedures for Trigeminal Neuralgia patients.

Estimates Trend

Over the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2020 earnings has risen to 2 cents.

The Zacks Consensus Estimate for its fourth-quarter fiscal 2020 revenues is pegged at $99.4 million, suggesting a 15.4% fall from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Aphria APHA, DexCom DXCM and HMS Holdings HMSY.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aphria’s long-term earnings growth rate is estimated at 24.6%. The company presently carries a Zacks Rank #2.

DexCom’s long-term earnings growth rate is estimated at 36.3%. The company presently carries a Zacks Rank #2.

HMS Holdings’ long-term earnings growth rate is estimated at 10%. It currently carries a Zacks Rank #2.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.

This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.

Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.

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Accuray Incorporated (ARAY) : Free Stock Analysis Report
 
DexCom, Inc. (DXCM) : Free Stock Analysis Report
 
HMS Holdings Corp (HMSY) : Free Stock Analysis Report
 
Aphria Inc. (APHA) : Free Stock Analysis Report
 
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