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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for fourth-quarter earnings suggests a 14.6% increase year over year to $1.02 per share. The estimate has remained stable in the past 60 days. The Zacks Consensus Estimate for fourth-quarter revenues currently stands at $979.3 million, a 3.6% improvement compared to the last year.
Image Source: Zacks Investment Research
Hologic has a strong track record of surpassing earnings estimates, outpacing the consensus mark in each of the trailing four quarters, the average being 4.50%.
Image Source: Zacks Investment Research
Q4 Earnings Whispers for HOLX
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is the case here.
Earnings ESP: Hologic has an Earnings ESP of +0.21%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
After several quarters of COVID-19-driven declines, Hologic made a strong comeback to growth in the third quarter of fiscal 2024, highlighting the strength of its core franchises. Within the Breast Health segment, the Breast Imaging business is expected to have delivered a robust performance in both domestic and international regions in the fiscal fourth quarter. The company is likely to have placed an increased number of gantries and may have exceeded last year’s delivery figures in 2024, as anticipated. Hologic’s new acquisition, Endomagnetics, may have contributed to the breast interventional business and the top line in the to-be-reported quarter. Our model projects a 4.4% year-over-year increase in the Breast Health segment’s revenues in the fourth quarter of fiscal 2024.
In Diagnostics, the Molecular Diagnostics unit is expected to have contributed to the company’s revenues, driven by the robust utilization of the Panther platform. Panther’s ongoing menu expansion is likely to have helped its global installed base to increase in the fiscal fourth quarter. The BV CV /TV assay, currently ranked the second-largest globally, is likely to have continued its strong growth trajectory led by its underlying strength. The Biotheranostics business may have remained accretive to growth for the Molecular business.
Meanwhile, in the Cytology and Perinatal business, the robust adoption of the Genius AI digital cytology system is likely to have contributed to international growth. However, year-over-year growth rates in the United States may have been affected by elevated cytology inventory levels from third-party shipping constraints in the previous year. This is also likely to have affected overall Diagnostics growth. Going by our model, the Diagnostics segment’s revenues are likely to decrease by 6% from the comparable fiscal 2023 figure.
Also, Hologic’s Skeletal Health business has been facing headwinds from lower Horizon DXA shipments resulting from a temporary stop ship related to a non-conformance issue. Although the company has been working with suppliers to resolve the situation, shipments are not likely to have resumed in the quarter. Our model estimate predicts an 11.9% year-over-year decrease in the division’s revenues in the fiscal fourth quarter.
Growth in the GYN Surgical arm is expected to have been fueled by MyoSure and the related Fluent Fluid Management System. Hologic is also likely to have gained from its Laparoscopy business, which is smaller in dollars. International growth is also likely to have been robust. Our model estimates a 5.9% improvement in this business in the fiscal fourth quarter.
In terms of profitability, Hologic is likely to have delivered a better margin performance, courtesy of its strong focus on operating efficiency. This is expected to have favored its bottom line in the quarter. Going by our model, the company’s non-GAAP operating expenses are expected to reduce by 4.5% in the fiscal fourth quarter.
Hologic’s Investment Thesis
Across all its global businesses, the company has built durable and diverse growth drivers that can adapt to changing market circumstances. Some of these products are more established in the U.S. market and also have substantial chances to expand internationally, including the lead Molecular diagnostics offering, STI testing. As the Panther footprint continues to grow, Hologic anticipates more contributions from the expanding assays and volumes over time. In Diagnostics, too, the company is bringing its liquid-based pap tests to many of the markets for the first time, offering strong growth potential.
Key Surgical product Myosure is increasingly gaining importance as the only minimally invasive alternative to a complete hysterectomy in many underpenetrated markets. This month, Hologic signed an agreement to acquire Gynesonics, the developer of Sonata System for the treatment of symptomatic uterine fibroids. The acquisition will expand minimally invasive treatment options for women. With its robust financial strength, Hologic is well-positioned to fund innovation, and pursue both M&A activities and share repurchases simultaneously.
Meanwhile, the company’s Breast Health segment continues to strongly benefit from both the gantry and service side of businesses. The interventional unit, including Brevera and the recurring revenue stream of biopsy needles and markers, is also close to getting bigger. The inclusion of Endomagnetics Ltd. into the portfolio has added more recurring revenue streams, and the combined global reach and breadth of interventional options are expected to accelerate growth in this space.
HOLX Price Performance
Hologic shares have jumped 14.1% so far this year, surpassing the industry’s 9.3% growth and the broader Zacks Medical sector’s 8.3% rise. HOLX has outperformed its peers QIAGEN (QGEN - Free Report) and Becton, Dickinson and Company (BDX - Free Report) in the same time frame.
HOLX Year-to-Date Price Comparison
Image Source: Zacks Investment Research
HOLX Trading Cheap
At a forward 12-month Price/Earnings (P/E) of 18.56X, Hologic shares are trading at a discount than the industry average of 33.58X. The stock is graded a Value Score of B at present.
P/E Ratio Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
How to Play HOLX Stock?
Hologic’s strength across its core franchises and contributions from new buyouts generate optimism for the stock to repeat its impressive earnings beat history. Given its potential undervaluation, existing investors may find it prudent to retain the stock for now. However, those eyeing the stock may want to wait for a better entry point as the company works through its Skeletal Health segment challenges.
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Should You Buy, Sell or Hold HOLX Stock Ahead of Q4 Earnings?
Hologic (HOLX - Free Report) is set to release fourth-quarter fiscal 2024 results on Nov. 4 after the closing bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for fourth-quarter earnings suggests a 14.6% increase year over year to $1.02 per share. The estimate has remained stable in the past 60 days. The Zacks Consensus Estimate for fourth-quarter revenues currently stands at $979.3 million, a 3.6% improvement compared to the last year.
Image Source: Zacks Investment Research
Hologic has a strong track record of surpassing earnings estimates, outpacing the consensus mark in each of the trailing four quarters, the average being 4.50%.
Image Source: Zacks Investment Research
Q4 Earnings Whispers for HOLX
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is the case here.
Earnings ESP: Hologic has an Earnings ESP of +0.21%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.
Factors Shaping Hologic’s Q4 Results
After several quarters of COVID-19-driven declines, Hologic made a strong comeback to growth in the third quarter of fiscal 2024, highlighting the strength of its core franchises. Within the Breast Health segment, the Breast Imaging business is expected to have delivered a robust performance in both domestic and international regions in the fiscal fourth quarter. The company is likely to have placed an increased number of gantries and may have exceeded last year’s delivery figures in 2024, as anticipated. Hologic’s new acquisition, Endomagnetics, may have contributed to the breast interventional business and the top line in the to-be-reported quarter. Our model projects a 4.4% year-over-year increase in the Breast Health segment’s revenues in the fourth quarter of fiscal 2024.
In Diagnostics, the Molecular Diagnostics unit is expected to have contributed to the company’s revenues, driven by the robust utilization of the Panther platform. Panther’s ongoing menu expansion is likely to have helped its global installed base to increase in the fiscal fourth quarter. The BV CV /TV assay, currently ranked the second-largest globally, is likely to have continued its strong growth trajectory led by its underlying strength. The Biotheranostics business may have remained accretive to growth for the Molecular business.
Meanwhile, in the Cytology and Perinatal business, the robust adoption of the Genius AI digital cytology system is likely to have contributed to international growth. However, year-over-year growth rates in the United States may have been affected by elevated cytology inventory levels from third-party shipping constraints in the previous year. This is also likely to have affected overall Diagnostics growth. Going by our model, the Diagnostics segment’s revenues are likely to decrease by 6% from the comparable fiscal 2023 figure.
Also, Hologic’s Skeletal Health business has been facing headwinds from lower Horizon DXA shipments resulting from a temporary stop ship related to a non-conformance issue. Although the company has been working with suppliers to resolve the situation, shipments are not likely to have resumed in the quarter. Our model estimate predicts an 11.9% year-over-year decrease in the division’s revenues in the fiscal fourth quarter.
Growth in the GYN Surgical arm is expected to have been fueled by MyoSure and the related Fluent Fluid Management System. Hologic is also likely to have gained from its Laparoscopy business, which is smaller in dollars. International growth is also likely to have been robust. Our model estimates a 5.9% improvement in this business in the fiscal fourth quarter.
In terms of profitability, Hologic is likely to have delivered a better margin performance, courtesy of its strong focus on operating efficiency. This is expected to have favored its bottom line in the quarter. Going by our model, the company’s non-GAAP operating expenses are expected to reduce by 4.5% in the fiscal fourth quarter.
Hologic’s Investment Thesis
Across all its global businesses, the company has built durable and diverse growth drivers that can adapt to changing market circumstances. Some of these products are more established in the U.S. market and also have substantial chances to expand internationally, including the lead Molecular diagnostics offering, STI testing. As the Panther footprint continues to grow, Hologic anticipates more contributions from the expanding assays and volumes over time. In Diagnostics, too, the company is bringing its liquid-based pap tests to many of the markets for the first time, offering strong growth potential.
Key Surgical product Myosure is increasingly gaining importance as the only minimally invasive alternative to a complete hysterectomy in many underpenetrated markets. This month, Hologic signed an agreement to acquire Gynesonics, the developer of Sonata System for the treatment of symptomatic uterine fibroids. The acquisition will expand minimally invasive treatment options for women. With its robust financial strength, Hologic is well-positioned to fund innovation, and pursue both M&A activities and share repurchases simultaneously.
Meanwhile, the company’s Breast Health segment continues to strongly benefit from both the gantry and service side of businesses. The interventional unit, including Brevera and the recurring revenue stream of biopsy needles and markers, is also close to getting bigger. The inclusion of Endomagnetics Ltd. into the portfolio has added more recurring revenue streams, and the combined global reach and breadth of interventional options are expected to accelerate growth in this space.
HOLX Price Performance
Hologic shares have jumped 14.1% so far this year, surpassing the industry’s 9.3% growth and the broader Zacks Medical sector’s 8.3% rise. HOLX has outperformed its peers QIAGEN (QGEN - Free Report) and Becton, Dickinson and Company (BDX - Free Report) in the same time frame.
HOLX Year-to-Date Price Comparison
Image Source: Zacks Investment Research
HOLX Trading Cheap
At a forward 12-month Price/Earnings (P/E) of 18.56X, Hologic shares are trading at a discount than the industry average of 33.58X. The stock is graded a Value Score of B at present.
P/E Ratio Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
How to Play HOLX Stock?
Hologic’s strength across its core franchises and contributions from new buyouts generate optimism for the stock to repeat its impressive earnings beat history. Given its potential undervaluation, existing investors may find it prudent to retain the stock for now. However, those eyeing the stock may want to wait for a better entry point as the company works through its Skeletal Health segment challenges.