We recently downgraded Accuray Incorporated (ARAY) to Underperform with a target price of $6. Accuray reported a net loss of 6 cents per share in the first quarter of fiscal 2010, compared to the Zacks Consensus Estimate of a net loss of 3 cents per share and unchanged from the year-ago figure. Total revenues declined 9.5% year over year to $50.6 million in the reported quarter.
Gross margin in the reported quarter declined 820 basis points (bps) year over year to 42.7%. Selling and marketing expenses as a percentage of sales declined 700 bps year over year to 17.1%. Research and development expenses as a percentage of sales declined 60 bps year over year to 15.1%. General and administrative expenses as a percentage of sales declined 100 bps year over year to 17.7%.
Lower operating expenses helped improve the operating margin that increased 40 bps year over year to a negative 7.2%. Net margin declined 80 bps year over year to a negative 6.5%.
Accuray provided only sales guidance for full fiscal 2010. For the year, sales are estimated between $215 million and $230 million.
Headquartered in Sunnyvale, California, Accuray Incorporated designs, develops, and sells the CyberKnife System, an image-guided robotic radiosurgery system used for the treatment of solid tumors. The CyberKnife System is the first and only commercially available intelligent robotic radiosurgery system designed to treat solid tumors anywhere in the body. This is as an alternative to traditional surgery.
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