After reporting encouraging fiscal 2019 first-quarter results, shares of Accuray (NASDAQ:ARAY), a medical device company that makes the CyberKnife Stereotactic Radiosurgery System, were up 35% as of 2:00 p.m. EDT on Wednesday.
Here's a look at the key numbers from the quarter:
- Revenue increased 5% to $95.8 million. That was a smidge higher than Wall Street was expecting.
- Net loss was $9.2 million, or $0.11 per share. That was worse than the $0.09 loss that analysts had predicted.
Looking beyond the numbers, management stated that China's Ministry of Health announced Type A and B quotas and licenses and that it is planning on cutting annual operating costs by $15 million to get the company on a path to profitability.
In response to these recent news items, the company now expects full-year revenue growth of 3% to 5% and full-year adjusted EBITDA between $23 million and $29 million.
When combined with Accuray's beaten-down share price -- shares had fallen nearly 30% over the last year prior to today's jump -- it is understandable that Accuray's long-suffering bulls are finally having a good day.
I think that Accuray makes an interesting product that serves a real need, but I have a hard time getting excited about a company that has been a dreadful long-term investment, only promises 5% year-over-year revenue growth, and has to lean on cost-cutting moves to get to profitability. For that reason, my plan is to keep my capital far away from Accuray's stock.