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Hologic Banks on Diagnostics, GYN Surgical Prospects Bright

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On Feb 14, we issued an updated research report on Hologic, Inc. (HOLX - Free Report) . The stock carries a Zacks Rank #2 (Buy).

Hologic posted better-than-expected results in first-quarter fiscal 2018, primarily on the strength of Molecular Diagnostics.

In the fiscal first quarter, sales increased 5.3% at CER. The company’s global growth was driven by an increasing market share and utilization of fully automated Panther system along with a continued solid uptake of Aptima women's health products. Notably, Aptima women’s health assays are dominant in the testing labs for detecting chlamydia, gonorrhea, HPV (Human papillomavirus) and trichomonas.

Performance within the GYN Surgical space was disappointing in the reported quarter due to external factors majorly. Moreover, four extra selling days in the prior-year period left a significantly adverse effect on the year-over-year comparison. Situation grew tougher in the quarter under review as the company registered a windfall gain in the year-ago quarter from the recall of a competitive product.

Nonetheless, Hologic has huge future prospects in this business. We are upbeat about the recent commercial launch of MyoSure MANUAL device in the United States. In addition to MyoSure MANUAL, the Myosure products portfolio consists of MyoSure, MyoSure REACH, MyoSure XL and MyoSure LITE devices. While MyoSure continues to show solid growth, the company pursues a string of developmental strategies in the Surgical space. Notably, Hologic appointed new leadership about six months ago with the team upgrading sales talent, structure and growth-boosting incentives.

 

On the flip side, the blood screening divestiture continues to impede growth. Foreign currency headwinds and a competitive landscape also persistently pose challenges to the company.

Over the past three months, Hologic has been trading below the industry. The stock has declined 1.4% against its industry’s 7.7% gain.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Centene (CNC - Free Report) , athenahealth and BIOVERATIV , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Centene has an impressive projected long-term growth rate of 14.6%. The stock has returned 23.2% in the last six months.

athenahealth has an expected long-term growth rate of 23.1%. The stock has gained 7.3% in the last three months.

BIOVERATIV has an expected long-term growth rate of 14%. The stock has soared 87.2% in the last three months.

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