What happened

Radiation therapy specialist ViewRay (VRAY) trailed the market by a wide margin last month, shedding 22% compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The drop sent shares into significantly negative territory for the year, even though they had been up by as much as 40% in late July.

A nurse looking at a radiation monitor.

Image source. Getty Images.

So what

ViewRay's third-quarter report wasn't well received by investors. The company's $17.7 million of sales trailed expectations and soaring operating expenses ensured that net loss ballooned to $33 million, or $0.39 per share, from $11 million, or $0.19 per share, a year earlier.

Now what

Most of the cost surge can be blamed on turnover in ViewRay's executive ranks. The company's soft sales growth is also due to a temporary issue, management said, with an installation delay simply pushing a chunk of revenue out into fiscal 2019.  

Still, ViewRay had to book increasing losses while lowering its short-term sales outlook. Even though it still has a good shot at building a premium position in the radiation oncology space, that's a combination of trends that investors are likely to punish for a growth stock like this.