Piper Jaffray Upgrades Accuray (ARAY) to Buy

January 30, 2009 7:38 AM EST

Piper Jaffray & Co. upgrades Accuray Incorporated (Nasdaq: ARAY) from Neutral to Buy. Price target $7.

Piper analyst says, "We are upgrading ARAY to Buy following strong Q2 results as the company beat consensus estimates on both revenues and EPS, though it fell short of our PJC revenue estimate of $60.2 MM. The strong results give us increased confidence that revenues for FY09 will fall within the company's $230 - $250 MM guidance, and we believe our view that hospitals will continue to move forward with profit generating radiation oncology projects in spite of the challenging economic environment...We view increased focus on lung cancer as a positive...We were also encouraged by management commentary that they will do away with reporting "Contingent" backlog following the end of the fiscal year in June."

Accuray Incorporated has developed an intelligent robotic radiosurgery system, the CyberKnife system, designed to treat solid tumors anywhere in the body as an alternative to traditional surgery.