This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 5 Dumbest Things on Wall Street This Week: Jan. 11

3. Accuray Disarray

It may be a brand new year, yet our analyst friends on Wall Street are still up to the same old tricks.

Or as we say here at The Dumbest Lab: The more things change, the more they stay inane.

Take the case of poor, poor Accuray (ARAY - Get Report), for example.

The company has lost nearly a third of its stock-market value since last Friday after it announced that it anticipates fiscal second-quarter revenue of $72 million to $75 million compared to the $94 million Wall Street analysts were expecting. The company's brass blamed problems with its sales force, manufacturing and supply chain -- basically everything up to and including the leaky kitchen sink -- for the sales shortfall.

For the 2013 fiscal year, Accuray expects a loss of 87 to 95 cents per share on revenue of $320 million to $330 million. Analysts were on record predicting the company would post an adjusted loss of 55 cents per share on revenue of $406 million for the year.

Yep, Accuray proved its analyst followers to be anything but accurate with their forecasts. Nevertheless, despite the stock's shellacking, Accuray's fans on Wall Street remained resolute.

In his note titled "No visibility, but can't get much cheaper," Lazard Capital Markets analyst Sean Lavin opined: "While we and it seems management have limited visibility on future orders and revenue, we remain at 'buy' given the shares were trading at just 0.88x in afterhours vs. our 12-24 month revenue estimate. That said, we believe the upside outweighs the downside. We see an investment in Accuray as one with significant potential upside, but also a lot of risk."

Um, sorry Sean, but if the stock "can't get much cheaper," then how is there "also a lot of risk"? It seems to us like there is a bit of a disconnect there, dontcha think?

Jefferies analyst Raj Denhoy offered even more of a head-scratcher for his loyal hangers-on. Denhoy kept his "buy" rating on the stock while drastically reducing his price target to $6.50 from $10, saying: "The reset under new management was expected but the severity was a surprise."

Thanks, Raj. That's like saying: "We expected the company to kick its shareholders in the groin; we just didn't think it would be that hard."

Come on, guys. There's no need to experiment with any new excuses for your bad calls simply because it's a new year. Stick with the classic and you'll be fine. Simply say: "We loved Accuray as a 'buy' at $7, but we really love it at $4.80."

What's so hard about that?
3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AIG $61.82 0.37%
ARAY $6.74 2.12%
GOOG $520.51 -0.19%
SHLD $26.70 -1.18%
AAPL $125.42 0.72%

Markets

DOW 17,619.51 +23.16 0.13%
S&P 500 2,063.12 +5.48 0.27%
NASDAQ 4,986.8670 +28.3990 0.57%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs