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Here's Why You Should Retain Hologic (HOLX) Stock for Now
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Hologic, Inc. (HOLX - Free Report) is well poised for growth in coming quarters, backed by continued recovery in procedural volumes and an acceleration from the new business lines. The company’s expanded global installed base of more than 3,250 Panthers instruments represents the catalyst for Hologic’s sustained growth. However, stiff competition and currency headwinds do not bode well.
In the past year, this Zacks Rank #3 (Hold) stock has gained 5.8% compared with a 4% decline of the industry and a 5.9% rise of the S&P 500.
The renowned medical device company has a market capitalization of $18.54 billion. Its earnings in third-quarter fiscal 2023 surpassed the Zacks Consensus Estimate by 5.7%.
Let’s delve deeper.
Factors at Play
Molecular Diagnostics Growth Continues: Within Molecular Diagnostics, Hologic’s recently-acquired Biotheranostics also continues to shine, being the top and the bottom line.
The company’s expanded global installed base of Panthers, over 3,250 strong, marks the catalyst for the division's sustained growth. Panther's superior workflow, combined with a broad menu of nearly 20 FDA-approved assays across the Panther and Panther Fusion systems, creates tremendous value for customers and differentiates Hologic’s from competitors.
Strength in GYN Surgical: GYN Surgical's growth continues to be driven by strong contributions from a hysteroscopic portfolio of MyoSure, the Fluent fluid management system and NovaSure. The company is encouraged by strong performance from its latest NovaSure iteration, the NovaSure V5. The laparoscopic portfolio continues to build momentum and is growing into a larger driver for the division. Through Acessa and Bolder acquisitions, the company integrated Acessa’s procedure and Bolder’s advanced vessel sealing portfolio into its product line.
Growth Initiatives: To streamline its operations and reduce the cost of revenues, Hologic has been adopting a few significant strategies over the past few years. The company has invested deliberately and opportunistically in commercial areas where management has recognized a good return. These include Hologic’s Genius marketing campaign in Breast Health, cervical cancer co-testing initiatives in Diagnostics and efforts to gain competitive market share with NovaSure. Per management, these strategic initiatives are already paying off through increased brand awareness, market share gains and price stability, which will contribute to the company’s sales.
Downsides
Foreign Exchange Headwinds: We are apprehensive about the challenges Hologic faces due to unfavorable foreign currency impacts that have been affecting the company’s overall performance in the past few quarters.
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Competitive Landscape: Hologic operates in a highly competitive industry. Its mammography, related products and subsystems compete worldwide with products offered by several competitors, including General Electric Company (GE), Siemens, Koninklijke Philips NV, or Philips, Planmed Oy.
Estimate Trends
In the past 90 days, the Zacks Consensus Estimate for Hologic’s fiscal 2023 earnings has been moved 0.8% north to $3.92 per share.
The Zacks Consensus Estimate for HOLX’s fiscal 2023 revenues is pegged at $4.03 billion, suggesting a 17.2% fall from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are Elevance Health, Inc. (ELV - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
Elevance Health reported second-quarter 2023 adjusted earnings per share (EPS) of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Patterson Companies has an Earnings ESP of +5.66% and a Zacks Rank of 1. PDCO has an estimated long-term growth rate of 9.2%.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.5%.
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Here's Why You Should Retain Hologic (HOLX) Stock for Now
Hologic, Inc. (HOLX - Free Report) is well poised for growth in coming quarters, backed by continued recovery in procedural volumes and an acceleration from the new business lines. The company’s expanded global installed base of more than 3,250 Panthers instruments represents the catalyst for Hologic’s sustained growth. However, stiff competition and currency headwinds do not bode well.
In the past year, this Zacks Rank #3 (Hold) stock has gained 5.8% compared with a 4% decline of the industry and a 5.9% rise of the S&P 500.
The renowned medical device company has a market capitalization of $18.54 billion. Its earnings in third-quarter fiscal 2023 surpassed the Zacks Consensus Estimate by 5.7%.
Let’s delve deeper.
Factors at Play
Molecular Diagnostics Growth Continues: Within Molecular Diagnostics, Hologic’s recently-acquired Biotheranostics also continues to shine, being the top and the bottom line.
The company’s expanded global installed base of Panthers, over 3,250 strong, marks the catalyst for the division's sustained growth. Panther's superior workflow, combined with a broad menu of nearly 20 FDA-approved assays across the Panther and Panther Fusion systems, creates tremendous value for customers and differentiates Hologic’s from competitors.
Strength in GYN Surgical: GYN Surgical's growth continues to be driven by strong contributions from a hysteroscopic portfolio of MyoSure, the Fluent fluid management system and NovaSure. The company is encouraged by strong performance from its latest NovaSure iteration, the NovaSure V5. The laparoscopic portfolio continues to build momentum and is growing into a larger driver for the division. Through Acessa and Bolder acquisitions, the company integrated Acessa’s procedure and Bolder’s advanced vessel sealing portfolio into its product line.
Growth Initiatives: To streamline its operations and reduce the cost of revenues, Hologic has been adopting a few significant strategies over the past few years. The company has invested deliberately and opportunistically in commercial areas where management has recognized a good return. These include Hologic’s Genius marketing campaign in Breast Health, cervical cancer co-testing initiatives in Diagnostics and efforts to gain competitive market share with NovaSure. Per management, these strategic initiatives are already paying off through increased brand awareness, market share gains and price stability, which will contribute to the company’s sales.
Downsides
Foreign Exchange Headwinds: We are apprehensive about the challenges Hologic faces due to unfavorable foreign currency impacts that have been affecting the company’s overall performance in the past few quarters.
Competitive Landscape: Hologic operates in a highly competitive industry. Its mammography, related products and subsystems compete worldwide with products offered by several competitors, including General Electric Company (GE), Siemens, Koninklijke Philips NV, or Philips, Planmed Oy.
Estimate Trends
In the past 90 days, the Zacks Consensus Estimate for Hologic’s fiscal 2023 earnings has been moved 0.8% north to $3.92 per share.
The Zacks Consensus Estimate for HOLX’s fiscal 2023 revenues is pegged at $4.03 billion, suggesting a 17.2% fall from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are Elevance Health, Inc. (ELV - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
Elevance Health reported second-quarter 2023 adjusted earnings per share (EPS) of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Patterson Companies has an Earnings ESP of +5.66% and a Zacks Rank of 1. PDCO has an estimated long-term growth rate of 9.2%.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.5%.