It’s been a rough go for Accuray (NASDAQ:ARAY) since my last update on the shares. The combination of a weaker tape for small-cap med-tech and a lackluster fiscal third quarter hasn’t been a good one for the shares, which have lost
More 'Hurry Up And Wait' For Accuray, But The China Opportunity Is Coming Through
Summary
- Accuray's fiscal third quarter was a little better than expected, but the lack of strong order momentum and/or upgraded guidance from management has tempered investor enthusiasm.
- The China opportunity remains large, and Accuray is well-positioned with its strong track record of winning Type A licenses and its partnership with CIRC, but it will take time.
- Management has developed and released several technological advances to the basic systems, improving utility and price/performance, and a greater move toward hypofractionation should help adoption.
- Accuray shares should trade closer to $6-$7 today, but could trade in the double digits if management can execute on opportunities in China, the U.S., and Japan over the next two years.
Stephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).
Analyst’s Disclosure:I am/we are long ARAY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.