Brean Capital Sees Limited 2Q15 Visibility For Accuray

In a report published Friday, Brean Capital analyst Jason Wittes reiterated a Buy rating and $12.00 price target on

. In the report, Brean Capital noted, “We have been getting questions about ARAY's upcoming quarter, given the likelihood like many other companies (and as they did last year) that they take the opportunity to pre-report into their upcoming presentation next week (Monday at 4PM PST/7PM EST). We are less focused on this quarter than on the second half when the US business should start to contribute more with additional kickers from 2H China approvals and the Multi-Leaf Collimator (MLC) release for CyberKnife. We are projecting $37 million in gross orders (from $59 million in 1Q, and versus $80 million in the year-ago quarter) and significantly lower net orders of $28 million (from $32 million in 1Q and $59 million in the yea- ago quarter)--due to a similarly large number of age outs (~6 machines). As management has provided visibility on these age outs, unlike last quarter, we don't expect a major reaction. For revenues, we expect $101 million an increase of 8% versus consensus of $98.9 million. Margins will still likely be held back by an accelerated upgrade program for older Tomotherapy systems in the field, as well as the manufacturing move to Wisconsin, and we're projecting a loss of $0.04 versus consensus of a loss of $0.08. We continue to rate the stock a Buy.” Accuray closed on Thursday at $7.04.