Accuray Inc (ARAY)

[grantg2]

Zacks Report Out Today & an analysis...

Msg: 1966 of 1967 5/7/2008 12:38:26 PM
Author: PauvrePapillon
Strong Buy

Recs: 2
So why the negative headline?

Zacks has a report out on Accuray today which is obviously weighing on the share price; however, much like the drive-by media spin their stories on economic data toward the positive with a Democrat in the White House and to the negative with a Republican, Zacks’ latest report could just as easily have been entitled…

“Zacks Revisits Accuray, Raises Price Target 18 Percent Over Just Last Month”

but instead we see…

“Limited Accuray Expansion Expected”

http://biz.yahoo.com/zacks/080507/12641.html?.v=1

Three weeks ago Zacks held an $8.50 price target for Accuray. In today’s report, they actually raise their target to $10.00 and admit that even at this price their model is based on 2.3x calendar 2008 revenue estimate, which is at a discount to the group average multiple of roughly 2.6x. Projecting Accuray at the group multiple would add another dollar to the price. So the headline is ridiculously misleading in that, in today’s report, Zacks actually raises (not lowers) its expectations for Accuray’s expansion. Here's a link to the earlier report.

”Accuray Initiated at a Hold”

http://biz.yahoo.com/zacks/080415/12343.html?.v=1

Bottom line here is that in direct opposition to the headline, Zacks actually raised substantially its outlook for Accuray over its report of three weeks previous.

So why the negative headline?

Such are the trials and tribulations of coming to the market with a truly disruptive technology.