Soleil Maintains Hold For TomoTherapy (TOMO)

Soleil Securities maintains a "hold" for TomoTherapy Inc. (NASDAQ: TOMO) despite its reasonable performance in the fourth quarter, amid disappointing 2010 guidance. Also, as the U.S. market recovers, Soleil expects increasing competition to put pressure on TomoTherapy’s future performance. The target price is however raised to $3.5 from the previous $3.0.

TomoTherapy posted losses better than expected with actual fourth quarter LPS of ($0.07) compared to Soleil’s estimate and consensus of ($0.15) supported by recovering gross margins. Management provided a forecast of flat sales in 2010 and LPS of ($0.65) per share due to higher operating expenses especially R&D. Soleil has lowered 2010 LPS to ($0.70) from the previous ($0.52).