Investors in ViewRay (NASDAQ:VRAY), a healthcare company focused on next-generation radiation therapy machines, are having a rough day. Shares are down 21% as of 12:08 p.m. EST on Monday after management reported preliminary fourth-quarter and full-year results that missed the mark.
Here are the numbers traders are reacting to today:
- Fourth-quarter 2019 revenue is estimated to be about $17 million. That's down about 19% from the year-ago period and is short of the $18.3 million that Wall Street was expecting.
- Four new orders were received during the quarter, which represents about $21 million in future revenue. By contrast, in the year-ago quarter, the company received eight orders worth about $49 million.
- Full-year 2019 revenue is expected to be about $88 million. That's also behind the $89.8 million that analysts were modeling.
- Backlog at year-end was $227 million.
- Cash balance at year-end was $227 million.
- Cash burn for the quarter was about $3 million.
- Chief Commercial Officer Jim Alecxih announced that he will be leaving the company in mid-January. The company has no plans to hire a new COO.
Given the worse-than-hoped-for results and weak order book, it's easy to understand why shares are being mauled today.
ViewRay CEO Scott Drake did his best to stay upbeat: "In 2019 we built significant organizational expertise, made progress on our innovation and clinical pipelines, and fortified our balance sheet. We are now better positioned than ever to improve the treatment paradigm for cancer patients."
2019 was a tough year for ViewRay, but the news flow wasn't all bad. The company announced two significant deals with Elekta AB and Medtronic that bolstered its balance sheet and enhanced its commercial capabilities.
However, the declining year-over-year sales and order total show that ViewRay is having trouble with sales execution, so it's understandable that growth stock investors are not happy. ViewRay's stock might be a bargain today if the company can get back on track in 2020, but this is a high-risk situation, so my plan is to keep my distance.