Here's Why You Should Retain Accuray Stock in Your Portfolio Now

Accuray Incorporated ARAY 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 the fourth quarter of fiscal 2024 and potential in the Radiosurgery Market, is expected to contribute further. However, reimbursement uncertainties and macroeconomic instability are concerning.This Zacks Rank #3 (Hold) company has lost 32.9% in the year-to-date period against 6.1% growth of the industry. The S&P 500 has witnessed 22.5% growth in the said time frame.The renowned radiation oncology company has a market capitalization of $187.5 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 ResearchReasons Favoring Accuray’s GrowthPotential 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 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 ARAYMacroeconomic Instability: Accuray’s business is materially affected by global market conditions and the overall economy.Additionally, uncertain credit markets and apprehensions regarding the availability of credit, including concerns related to the pandemic, could impact consumer and customer demand for Accuray’s products, as well as its ability to manage normal commercial relationships with its customers, suppliers and creditors. If the current situation deteriorates or does not improve, the company’s business could be affected by factors such as reduced demand for its products resulting from a slowdown or volatility in the general economy, among others.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 TrendAccuray has been witnessing a stable estimate revision trend for fiscal 2025. Over the past 60 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 PicksSome better-ranked stocks in the broader medical space are DaVita Inc. DVA, Baxter International Inc. BAX and Boston Scientific Corporation BSX.DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 24.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.DaVita’s shares have gained 116.4% compared with the industry’s 38.3% rise in the past year.Baxter, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10%. BAX’s earnings surpassed estimates in each of the trailing four quarters, with the average being 3.7%.Baxter has gained 15% compared with the industry’s 30.7% rise in the past year.Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.Boston Scientific’s shares have rallied 74.7% compared with the industry’s 30.7% rise in the past year.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Accuray Incorporated (ARAY): Free Stock Analysis Report Baxter International Inc. (BAX): Free Stock Analysis Report DaVita Inc. (DVA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks