We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is HOLX Stock a Smart Hold for Your Portfolio Right Now?
Read MoreHide Full Article
Hologic, Inc.’s (HOLX - Free Report) sustained momentum in the Molecular Diagnostics portfolio is poised to fuel its growth in the upcoming quarters. A crucial part of its long-term strategy, the company is planning to expand into more countries overseas, which are largely untapped. It is also using its strong cash position strategically by focusing on acquisitions and share buybacks. Meanwhile, concerns remain over the impact of macroeconomic challenges on Hologic’s operations. Adverse currency impact also adds to the worry.
Year to date, this Zacks Rank #3 (Hold) stock has gained 12.2% compared with the 7.6% growth of the industry and the S&P 500’s 20% gain.
The renowned medical device company has a market capitalization of $18.55 billion. Hologic boasts a 5.12% earnings yield, significantly outpacing the industry average of -5.14%. In the trailing four quarters, it has delivered an average earnings surprise of 4.5%.
Let’s delve deeper.
Hologic’s Tailwinds
Molecular Diagnostics Growth Continues: One of Hologic’s principal revenue-generating product lines, the Molecular Diagnostics business has consistently maintained high single to double-digit gains in 13 of the last 15 quarters. The growth continues to be driven by the ongoing adoption and utilization of the broad menu in the Panther platform. Globally, the Panther base has surpassed 3,300 installations as of the third quarter of fiscal 2024, growing to emerge as a catalyst for the division’s sustained growth.
The BV/CV/TV assay has grown to become the second largest worldwide due to its robust underlying strength. The Biotheranostics business also remains crucial to the base Molecular business, with accretive revenue growth. At a global level, STI (sexually transmitted infections) testing represents the company’s largest category in molecular diagnostics and also a significant growth opportunity for Hologic.
Focus on International Operations: Hologic’s global expansion is a critical element of its growth strategy over the long term. While many of its best-in-class products, such as ThinPrep Pap, 2D and 3D mammography tests, as well as NovaSure and MyoSure procedures, command a leading share in the domestic market, the company holds a disproportionately low market share overseas, indicating huge untapped potential. Through initiatives such as the global Women's Health Index and the partnership with the Women's Tennis Association, the company aims to capitalize on this opportunity, more particularly in the Europe and Asia Pacific markets. In the third quarter of fiscal 2024, molecular STI testing, cytology and MyoSure experienced strong growth in the global markets.
Image Source: Zacks Investment Research
Focused Capital Deployment: Lately, Hologic is utilizing the opportunity to deploy the cash balance more significantly. With more than $2 billion in cash and strong cash flow as of third-quarter fiscal 2024-end, the company is well-positioned to fund key in-house initiatives and also deploy cash toward both M&A and share repurchases. Regarding capital allocation, the company is focused on tuck-in opportunities for its three core franchises. The recent closing of the Endomagnetics acquisition is marked as a prudent capital investment, which is expected to be accretive to revenues, margins and EPS over time. Furthermore, Hologic deployed $100 million during the quarter to repurchase 1.4 million shares.
Factors Weighing on HOLX
Macroeconomic Concerns: Ongoing concerns about a potential long-term and widespread recession have led to increased market volatility and lowered expectations for economic growth in the world. Worldwide political and social uncertainty, economic disruptions, and continued supply chain constraints have impacted the costs and sales of Hologic’s products in certain countries. These global economic challenges may cause medical equipment purchasers to cut medical health insurance premiums and procurement activities.
Foreign Exchange Headwinds: We remain worried about the significant challenges Hologic faced owing to unfavorable foreign currency impact that has been adversely affecting the company’s overall performance in the past few quarters. With the company’s international sales often denominated in foreign currencies, like the Euro, UK Pound and Renminbi, an increase in the value of the dollar reduces the reported value of Hologic’s revenues and cash flows.
HOLX Stock Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Hologic’s fiscal 2024 earnings has remained constant at $4.09 per share.
The Zacks Consensus Estimate for HOLX’s fiscal 2024 revenues is pegged at $4.02 billion, suggesting a 0.2% fall from the year-ago reported number.
TransMedix Group’s earnings are expected to surge 259.7% in 2024. Its shares have rallied 154.6% compared with the industry’s 18.5% growth in the past year. TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 12.8%. Shares of the company have surged 172.7% compared with the industry’s 18.4% growth in the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 96.5%.
Boston Scientific has an estimated earnings growth rate of 17.1% compared with the industry’s 14.9%. Shares of the company have rallied 55.6% compared with the industry’s 21.5% growth in the past year. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is HOLX Stock a Smart Hold for Your Portfolio Right Now?
Hologic, Inc.’s (HOLX - Free Report) sustained momentum in the Molecular Diagnostics portfolio is poised to fuel its growth in the upcoming quarters. A crucial part of its long-term strategy, the company is planning to expand into more countries overseas, which are largely untapped. It is also using its strong cash position strategically by focusing on acquisitions and share buybacks. Meanwhile, concerns remain over the impact of macroeconomic challenges on Hologic’s operations. Adverse currency impact also adds to the worry.
Year to date, this Zacks Rank #3 (Hold) stock has gained 12.2% compared with the 7.6% growth of the industry and the S&P 500’s 20% gain.
The renowned medical device company has a market capitalization of $18.55 billion. Hologic boasts a 5.12% earnings yield, significantly outpacing the industry average of -5.14%. In the trailing four quarters, it has delivered an average earnings surprise of 4.5%.
Let’s delve deeper.
Hologic’s Tailwinds
Molecular Diagnostics Growth Continues: One of Hologic’s principal revenue-generating product lines, the Molecular Diagnostics business has consistently maintained high single to double-digit gains in 13 of the last 15 quarters. The growth continues to be driven by the ongoing adoption and utilization of the broad menu in the Panther platform. Globally, the Panther base has surpassed 3,300 installations as of the third quarter of fiscal 2024, growing to emerge as a catalyst for the division’s sustained growth.
The BV/CV/TV assay has grown to become the second largest worldwide due to its robust underlying strength. The Biotheranostics business also remains crucial to the base Molecular business, with accretive revenue growth. At a global level, STI (sexually transmitted infections) testing represents the company’s largest category in molecular diagnostics and also a significant growth opportunity for Hologic.
Focus on International Operations: Hologic’s global expansion is a critical element of its growth strategy over the long term. While many of its best-in-class products, such as ThinPrep Pap, 2D and 3D mammography tests, as well as NovaSure and MyoSure procedures, command a leading share in the domestic market, the company holds a disproportionately low market share overseas, indicating huge untapped potential. Through initiatives such as the global Women's Health Index and the partnership with the Women's Tennis Association, the company aims to capitalize on this opportunity, more particularly in the Europe and Asia Pacific markets. In the third quarter of fiscal 2024, molecular STI testing, cytology and MyoSure experienced strong growth in the global markets.
Image Source: Zacks Investment Research
Focused Capital Deployment: Lately, Hologic is utilizing the opportunity to deploy the cash balance more significantly. With more than $2 billion in cash and strong cash flow as of third-quarter fiscal 2024-end, the company is well-positioned to fund key in-house initiatives and also deploy cash toward both M&A and share repurchases. Regarding capital allocation, the company is focused on tuck-in opportunities for its three core franchises. The recent closing of the Endomagnetics acquisition is marked as a prudent capital investment, which is expected to be accretive to revenues, margins and EPS over time. Furthermore, Hologic deployed $100 million during the quarter to repurchase 1.4 million shares.
Factors Weighing on HOLX
Macroeconomic Concerns: Ongoing concerns about a potential long-term and widespread recession have led to increased market volatility and lowered expectations for economic growth in the world. Worldwide political and social uncertainty, economic disruptions, and continued supply chain constraints have impacted the costs and sales of Hologic’s products in certain countries. These global economic challenges may cause medical equipment purchasers to cut medical health insurance premiums and procurement activities.
Foreign Exchange Headwinds: We remain worried about the significant challenges Hologic faced owing to unfavorable foreign currency impact that has been adversely affecting the company’s overall performance in the past few quarters. With the company’s international sales often denominated in foreign currencies, like the Euro, UK Pound and Renminbi, an increase in the value of the dollar reduces the reported value of Hologic’s revenues and cash flows.
HOLX Stock Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Hologic’s fiscal 2024 earnings has remained constant at $4.09 per share.
The Zacks Consensus Estimate for HOLX’s fiscal 2024 revenues is pegged at $4.02 billion, suggesting a 0.2% fall from the year-ago reported number.
Top MedTech Picks
Some better-ranked stocks in the broader medical space are TransMedix Group (TMDX - Free Report) , AxoGen (AXGN - Free Report) and Boston Scientific (BSX - Free Report) . While TransMedix Group currently sports a Zacks Rank #1 (Strong Buy), AxoGen and Boston Scientific each have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TransMedix Group’s earnings are expected to surge 259.7% in 2024. Its shares have rallied 154.6% compared with the industry’s 18.5% growth in the past year. TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 12.8%. Shares of the company have surged 172.7% compared with the industry’s 18.4% growth in the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 96.5%.
Boston Scientific has an estimated earnings growth rate of 17.1% compared with the industry’s 14.9%. Shares of the company have rallied 55.6% compared with the industry’s 21.5% growth in the past year. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.