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New Launches in Breast Health to Aid Hologic (HOLX) Q2 Earnings

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Hologic, Inc.’s (HOLX - Free Report) Diagnostics business has been gaining strength even amid the coronavirus-led market mayhem, banking on its robust Molecular Diagnostics testing products for coronavirus.

We anticipate the company’s second-quarter fiscal 2021 results, scheduled for an Apr 28 release after the closing bell, to duly reflect this strength.

Click here to know how the company’s overall second-quarter performance is expected to be.

Diagnostics

Hologic expects its Diagnostics segment to have maintained a stellar performance in fiscal second quarter due to growing demand for its Molecular Diagnostics testing products.

The company, in the last-reported quarter, had generated stupendous revenues worldwide on the back of increased production of and strong global demand for its two SARS-CoV-2 assays (primarily the Aptima SARS-CoV-2 assay and to a lesser extent the Panther Fusion SARS-CoV-2 assay). Given the unrelenting spread of the virus, this momentum is expected to have continued in the fiscal second quarter, thus driving the top line.

Hologic, Inc. Price and EPS Surprise

Hologic, Inc. Price and EPS Surprise

Hologic, Inc. price-eps-surprise | Hologic, Inc. Quote

During the last-reported quarter’s earnings call, Hologic had confirmed shipping a large volume of COVID-19 tests to customers. This trend is likely to have continued during the fiscal second quarter as well, due to continued surge in testing needs, thus making significant contribution to the top line.

Hologic’s FDA-approved Aptima HIV-1 Quant Dx viral load monitoring assay is likely to have continued showing high market acceptance through the fiscal second quarter, thus boosting revenues.

The Zacks Consensus Estimate for Molecular Diagnostics’ revenues is pegged at $976 million, suggesting a stupendous upsurge of 410.9% from the year-ago quarter’s reported figure.

Breast Health

Management, during the previous earnings call, observed that the Breast Health arm has been witnessing a faster-than-expected return to growth despite the pandemic-led challenging business climate. We remain optimistic about an improved sequential performance by the segment during fiscal second quarter, given the company’s ongoing efforts to diversify the business across the patient continuum of care.

Hologic made the U.S. commercial launch of its Genius AI detection technology in December. The technology, which is a deep-learning-based software designed to aid radiologists detect subtle potential cancers in breast tomosynthesis images, is likely to have made significant top-line contributions on the back of its robust adoption.

The company, in January 2021, announced the expansion of its ultrasound portfolio with the launch of the SuperSonic MACH 20 ultrasound system. The same month, Hologic announced the availability of 3D ultrasound imaging on the SuperSonic MACH 30 and 20 ultrasound systems in the European market. This innovation, which enables access to high-resolution B-mode and ShearWave PLUS elastography 3D volumes, is expected to have registered strong customer adoption during the to-be-reported quarter. These developments are likely to have pushed up segmental revenues during the to-be-reported quarter.

Hologic’s SuperSonic MACH 40 ultrasound system (which is equipped with 3D ultrasound imaging since December 2020) and its enhanced Unifi Analytics platform (available as Unifi Analytics 1.2 since November 2020) are expected to have been other top contributors to segmental revenues during the fiscal second quarter. Hologic is also likely to have continued to gain from its 3DQuorum Imaging Technology, powered by Genius AI, post its commercial launch in Europe in October 2020. These developments are expected to have contributed robustly to the company’s Breast Health arm’s revenues.

The Zacks Consensus Estimate for Breast Imaging’s revenues is pegged at $249 million, indicating a decline of 0.4% from the prior-year quarter’s figure.

What Our Model Suggests

Our proven model predicts an earnings beat for Hologic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Hologic has an Earnings ESP of +0.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering, as these too have the right combination of elements to beat on earnings this reporting cycle.

Elanco Animal Health Incorporated (ELAN - Free Report) has an Earnings ESP of +1.90% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Cooper Companies, Inc. (COO - Free Report) has an Earnings ESP of +7.06% and a Zacks Rank of 2, at present.

Owens & Minor, Inc. (OMI - Free Report) has an Earnings ESP of +2.41% and is a Zacks #1 Ranked stock.

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