BTIG downgraded ViewRay (NASDAQ:VRAY) to “neutral” from “buy” and removed its price target after the company’s 2020 revenue guidance of $58-million to $95-million was “well below even the lowest Street estimates.” The stock closed at $1.40 on March 12.
ViewRay designs, manufactures, and markets MRIdian, the first and only MRI-guided radiation therapy system able to both image and treat cancers simultaneously with MRI- based visualization.
Analyst Marie Thibault writes that the company has nine system installations in travel-restricted areas of the Asia-Pacific and Italy, with “two of these paused.”
For the first quarter, ViewRay has $10-million of revenue in hand with one more potential system installation, and there are two orders booked in the quarter. “While this detail limits downside surprise for the next earnings report, this is again below consensus expectations,” Ms. Thibault said.
With ViewRay falling short of expectations in recent quarters and with a 2020 revenue outlook below 2019 sales, “we think investor interest in waiting out a turnaround is waning,” she added.
“While we still believe the MRIdian technology offers better treatment and clinical benefit for patients, we are wary of high-priced capital equipment as economic uncertainty weighs on investors’ minds,” Ms. Thibault said. While ViewRay shares trade at a discount to the small-cap MedTech group, the “COVID-19 outbreak has thrown up more obstacles and plenty of uncertainty remains,” she added.
