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Hologic's (HOLX) New Launches Aid, Macroeconomic Issues Ail
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Hologic’s (HOLX - Free Report) progress in the domestic and international markets, strong pipeline of products and continued solid performance of the Molecular Diagnostics segment bolster our confidence. However, uncertainty related to COVID-19-related test sales and macroeconomic issues persists. The stock carries a Zacks Rank #3 (Hold) currently.
Hologic’s Molecular Diagnostics business is registering strong growth, driven by a combination of newer assays like BV, CV/TV and contributions from Amgen and HSV, as well as strong growth from the women's health menu. In terms of the latest development, the BV, CV/TV assay grew more than 20% in the fiscal first quarter.
In December 2023, Hologic launched a new FDA-approved Genius Digital Diagnostics System with the Genius Cervical AI algorithm. The launch marks the first and only FDA-cleared digital cytology system that combines deep-learning-based artificial intelligence with advanced volumetric imaging technology to help identify pre-cancerous lesions and cervical cancer cells.
The company’s expanded global installed base of more than 3,260 Panthers instruments represents the catalyst for the division's sustained growth. For Panther, as customers add more menus and drive incremental volume, Hologic’s Molecular Diagnostics business continues to grow while also becoming more valuable to its customers and more deeply rooted in their operations.
Hologic’s Breast Health segment is gaining from a broad portfolio of solutions for breast cancer care, primarily in the burgeoning spaces of radiology, breast surgery, pathology and treatment. Some of the company’s profit-making solutions include 3D digital mammography systems, image analytics software utilizing artificial intelligence, ultrasound imaging and minimally invasive breast biopsy guidance systems.
In addition, the company is also witnessing strong performance from the Brevera needles, as well as from 2-Mark markers used for marking biopsy sites in suspicious lesions and pressed tissue. Given the strong performance in the fiscal first quarter, Hologic believes its Breast Health franchise remains well positioned to deliver on its financial targets in fiscal 2024.
On the flip side, in the first quarter of fiscal 2024, COVID-19 revenues, which consisted of COVID-19 assay revenues of $26.8 million and other COVID-19 related revenues plus revenues from discontinued products, decreased 68.5% and 68.7% in constant currency.
Further, continued concerns about the systemic impact of potential long-term and widespread recession and geopolitical issues, including the war in Ukraine, have contributed to increased market volatility and diminished expectations for economic growth in the world. Hologic’s business and results of operations have been and may continue to be adversely impacted by changes in macroeconomic conditions, including inflation, rising interest rates and availability of capital markets.
Uncertainty about global economic conditions, particularly in emerging markets and countries with government-sponsored healthcare systems, may also lower demand for products and services and increase competition, which could result in a decline in sales volume.
In the first quarter of fiscal 2024, Hologic’s cost of products rose 3.7% year over year. The company-provided adjusted gross margin contracted 190 basis points to 60.8%.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
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Hologic's (HOLX) New Launches Aid, Macroeconomic Issues Ail
Hologic’s (HOLX - Free Report) progress in the domestic and international markets, strong pipeline of products and continued solid performance of the Molecular Diagnostics segment bolster our confidence. However, uncertainty related to COVID-19-related test sales and macroeconomic issues persists. The stock carries a Zacks Rank #3 (Hold) currently.
Hologic’s Molecular Diagnostics business is registering strong growth, driven by a combination of newer assays like BV, CV/TV and contributions from Amgen and HSV, as well as strong growth from the women's health menu. In terms of the latest development, the BV, CV/TV assay grew more than 20% in the fiscal first quarter.
In December 2023, Hologic launched a new FDA-approved Genius Digital Diagnostics System with the Genius Cervical AI algorithm. The launch marks the first and only FDA-cleared digital cytology system that combines deep-learning-based artificial intelligence with advanced volumetric imaging technology to help identify pre-cancerous lesions and cervical cancer cells.
The company’s expanded global installed base of more than 3,260 Panthers instruments represents the catalyst for the division's sustained growth. For Panther, as customers add more menus and drive incremental volume, Hologic’s Molecular Diagnostics business continues to grow while also becoming more valuable to its customers and more deeply rooted in their operations.
Hologic’s Breast Health segment is gaining from a broad portfolio of solutions for breast cancer care, primarily in the burgeoning spaces of radiology, breast surgery, pathology and treatment. Some of the company’s profit-making solutions include 3D digital mammography systems, image analytics software utilizing artificial intelligence, ultrasound imaging and minimally invasive breast biopsy guidance systems.
Hologic, Inc. Price
Hologic, Inc. price | Hologic, Inc. Quote
In addition, the company is also witnessing strong performance from the Brevera needles, as well as from 2-Mark markers used for marking biopsy sites in suspicious lesions and pressed tissue. Given the strong performance in the fiscal first quarter, Hologic believes its Breast Health franchise remains well positioned to deliver on its financial targets in fiscal 2024.
On the flip side, in the first quarter of fiscal 2024, COVID-19 revenues, which consisted of COVID-19 assay revenues of $26.8 million and other COVID-19 related revenues plus revenues from discontinued products, decreased 68.5% and 68.7% in constant currency.
Further, continued concerns about the systemic impact of potential long-term and widespread recession and geopolitical issues, including the war in Ukraine, have contributed to increased market volatility and diminished expectations for economic growth in the world. Hologic’s business and results of operations have been and may continue to be adversely impacted by changes in macroeconomic conditions, including inflation, rising interest rates and availability of capital markets.
Uncertainty about global economic conditions, particularly in emerging markets and countries with government-sponsored healthcare systems, may also lower demand for products and services and increase competition, which could result in a decline in sales volume.
In the first quarter of fiscal 2024, Hologic’s cost of products rose 3.7% year over year. The company-provided adjusted gross margin contracted 190 basis points to 60.8%.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.