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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 the coming quarters, backed by revenue growth with recovery in procedural volumes and acceleration from new business lines. The company’s Breast Health segment continues to deliver strong growth, driven by higher capital equipment revenues. Foreign exchange woes and stiff rivalry impede HOLX’s growth.
In the past six months, this Zacks Rank #3 (Hold) stock has declined 2.2% compared with the 0.1% fall of the industry and a 8.5% rise of the S&P 500.
The renowned medical device company has a market capitalization of $17.59 billion. Hologic surpassed earnings estimates in all the trailing four quarters, delivering an average surprise of 12.43%.
Let’s delve deeper.
Factors at Play
Strength in Breast Health: Hologic has been making impressive progress in the Breast Health arm recently, leveraging its strategic expansion efforts to diversify business across the patient continuum of care.
In the fourth quarter of fiscal 2023, the Breast Health arm registered strong growth. The recovery in its gantry business primarily drove the upside. Interventional Breast increased in the low double digits. Further, higher Trident systems unit sales and higher Faxitron breast-conserving surgery products supported growth. The increase in volume was driven by the improvement in supply chain constraints related to electronic components, primarily semiconductor chips.
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 the strong performance of its latest NovaSure iteration, the NovaSure V5. The laparoscopic portfolio continues to build momentum and is growing into a larger driver for the division.
Image Source: Zacks Investment Research
In terms of the latest developments, internationally, the Surgical business continues to register strong growth. In the fiscal 2023, Hologic’s international Surgical growth rate was more than double the U.S. growth rate.
Focus on International Operations: Hologic’s global expansion is a critical element of its growth strategy over the long term. The company is making significant efforts to enter new geographies as many of its best-in-class products command a leading share in the domestic market.
The company’s international sales have been a major catalyst in the past few years, with the major driver being the molecular diagnostics business. Hologic is increasingly focused on commercial infrastructure. The company has been progressing with respect to the placement of Panther instruments across the globe.
Downsides
Foreign Exchange Headwinds: We are apprehensive about the significant challenges Hologic faced owing to the unfavorable impact of foreign currency that has been affecting the company’s overall performance in the past few quarters. The company’s international sales are often denominated in foreign currencies, including the Euro, U.K. Pound and Renminbi. Changes in currency exchange rates, particularly the increase in the value of the dollar against any such foreign currencies, may reduce the reported value of Hologic’s revenues outside the United States and associated cash flows.
Competitive Landscape: Hologic operates in a highly-competitive industry. Its mammography, related products and subsystems compete on a worldwide basis with products offered by a number of competitors, including General Electric Company (GE), Siemens, Koninklijke Philips NV, or Philips, Planmed Oy, or Planmed, Agfa-Gevaert N.V., or Agfa, Carestream Health, Inc., FUJIFILM Holdings Corporation, or Fuji, I.M.S., and Toshiba Corporation.
Estimate Trends
In the past 90 days, the Zacks Consensus Estimate for Hologic’s fiscal 2024 earnings has moved up from $3.99 per share to $4.00.
The Zacks Consensus Estimate for HOLX’s fiscal 2024 revenues is pegged at $3.99 billion, suggesting a 1.1% fall from the year-ago reported number.
Key Picks
Some better-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Acadia Healthcare (ACHC - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have inched up 6.5% in the past year compared with the industry’s 11.8% rise.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 54.8% in the past year against the industry’s 3.5% decline.
Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.
Acadia Healthcare’s shares have gained 7.5% in the past six months compared with the industry’s rise of 5.5%.
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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 the coming quarters, backed by revenue growth with recovery in procedural volumes and acceleration from new business lines. The company’s Breast Health segment continues to deliver strong growth, driven by higher capital equipment revenues. Foreign exchange woes and stiff rivalry impede HOLX’s growth.
In the past six months, this Zacks Rank #3 (Hold) stock has declined 2.2% compared with the 0.1% fall of the industry and a 8.5% rise of the S&P 500.
The renowned medical device company has a market capitalization of $17.59 billion. Hologic surpassed earnings estimates in all the trailing four quarters, delivering an average surprise of 12.43%.
Let’s delve deeper.
Factors at Play
Strength in Breast Health: Hologic has been making impressive progress in the Breast Health arm recently, leveraging its strategic expansion efforts to diversify business across the patient continuum of care.
In the fourth quarter of fiscal 2023, the Breast Health arm registered strong growth. The recovery in its gantry business primarily drove the upside. Interventional Breast increased in the low double digits. Further, higher Trident systems unit sales and higher Faxitron breast-conserving surgery products supported growth. The increase in volume was driven by the improvement in supply chain constraints related to electronic components, primarily semiconductor chips.
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 the strong performance of its latest NovaSure iteration, the NovaSure V5. The laparoscopic portfolio continues to build momentum and is growing into a larger driver for the division.
In terms of the latest developments, internationally, the Surgical business continues to register strong growth. In the fiscal 2023, Hologic’s international Surgical growth rate was more than double the U.S. growth rate.
Focus on International Operations: Hologic’s global expansion is a critical element of its growth strategy over the long term. The company is making significant efforts to enter new geographies as many of its best-in-class products command a leading share in the domestic market.
The company’s international sales have been a major catalyst in the past few years, with the major driver being the molecular diagnostics business. Hologic is increasingly focused on commercial infrastructure. The company has been progressing with respect to the placement of Panther instruments across the globe.
Downsides
Foreign Exchange Headwinds: We are apprehensive about the significant challenges Hologic faced owing to the unfavorable impact of foreign currency that has been affecting the company’s overall performance in the past few quarters. The company’s international sales are often denominated in foreign currencies, including the Euro, U.K. Pound and Renminbi. Changes in currency exchange rates, particularly the increase in the value of the dollar against any such foreign currencies, may reduce the reported value of Hologic’s revenues outside the United States and associated cash flows.
Competitive Landscape: Hologic operates in a highly-competitive industry. Its mammography, related products and subsystems compete on a worldwide basis with products offered by a number of competitors, including General Electric Company (GE), Siemens, Koninklijke Philips NV, or Philips, Planmed Oy, or Planmed, Agfa-Gevaert N.V., or Agfa, Carestream Health, Inc., FUJIFILM Holdings Corporation, or Fuji, I.M.S., and Toshiba Corporation.
Estimate Trends
In the past 90 days, the Zacks Consensus Estimate for Hologic’s fiscal 2024 earnings has moved up from $3.99 per share to $4.00.
The Zacks Consensus Estimate for HOLX’s fiscal 2024 revenues is pegged at $3.99 billion, suggesting a 1.1% fall from the year-ago reported number.
Key Picks
Some better-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Acadia Healthcare (ACHC - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have inched up 6.5% in the past year compared with the industry’s 11.8% rise.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 54.8% in the past year against the industry’s 3.5% decline.
Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.
Acadia Healthcare’s shares have gained 7.5% in the past six months compared with the industry’s rise of 5.5%.