BTIG reduces Accuray shares target after disappointing Q3 results By Investing.com

On Thursday, BTIG adjusted its outlook for Accuray (NASDAQ:) Incorporated (NASDAQ: ARAY) shares, decreasing the price target from $7.00 to $6.00 while still recommending a Buy rating on the shares.

Accuray’s third fiscal quarter results fell short of expectations, with a reported total revenue of $101.1 million, a decline of 14.3% year-over-year, compared to the consensus estimate of $116.0 million. The company’s adjusted EBITDA was also below forecasts at $1.1 million, significantly lower than the anticipated $6.6 million.

The shortfall in revenue was attributed to eight fewer systems shipped, resulting in product revenue of $49.6 million versus the expected $56.8 million. Service revenue also did not meet expectations, coming in at $51.5 million, around $6 million less than forecasted.

Accuray cited delays in three system shipments and a general softness in the U.S. market as key reasons behind the revenue dip. The company pointed to more stringent capital equipment budgets and a lower prioritization for radiation therapy equipment as factors contributing to longer domestic equipment cycles and installation timelines.

In response to these challenges, Accuray has revised its full-year 2024 revenue guidance downward by $30.5 million to a range of $432 million to $437 million, which represents a decrease of 3.5% to 2.4% year-over-year. The adjusted EBITDA guidance has also been reduced by $8 million to between $19 million and $22 million, down from the previous range of $27 million to $30 million.

Despite the setbacks, Accuray remains committed to its long-term financial targets, which were established during the investor day in October last year. These goals include a compound annual growth rate (CAGR) of 4-6% in revenue and a doubling of adjusted EBITDA by the end of fiscal year 2026.

The company reported a strong book-to-bill ratio of approximately 1.8x, bolstered by a 21% year-over-year increase in gross orders totaling $89.1 million, driven by significant growth in the EIMEA region.

Additionally, Accuray anticipates regulatory progress with its Tomo C treatment planning software in China before the end of the fiscal year, which would enable the company to fully realize the margin benefits of system sales through their joint venture partner.

In India, approval for the Helix system is expected by the end of the 2024 calendar year. Despite the disappointing…