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Hologic's Q1 Earnings Coming Up: How to Play the Stock?
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Hologic (HOLX - Free Report) is set to release first-quarter fiscal 2025 results on Feb. 5 after the closing bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for first-quarter earnings suggests a 3.1% increase year over year to $1.01 per share. The estimate has remained stable in the past 30 days. The Zacks Consensus Estimate for first-quarter revenues currently stands at $1.03 billion, a 1.4% improvement compared to the last year.
Image Source: Zacks Investment Research
In the last four quarters, Hologic surpassed the consensus mark three times and missed once, the average surprise being 3.07%.
Image Source: Zacks Investment Research
Q1 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 not the case here.
Earnings ESP: Hologic has an Earnings ESP of -0.13%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
In the first quarter of fiscal 2025, Hologic is likely to have faced a few transitory challenges, including the pause of the Horizon DXA shipments in the Skeletal Health division. Although the company has been actively working with suppliers to resolve the issue, revenues are expected to have been affected in the first quarter. Our model forecast indicates a 43.3% year-over-year decline in business sales.
Additionally, recent hurricanes may have a residual impact, including the saline IV fluid shortage, which is likely to have impacted Hologic’s elective breast and surgical procedures. Nonetheless, we expect each of the company’s three core franchises to have performed well despite strong prior-year comparisons.
The Breast Health segment is likely to have benefited from robust service contract revenues from an expanded installed base. Interventional products like the portfolio of disposable needles and markers may have boosted the performance. Endomagnetics is likely to have helped Hologic thrive in the expanding interventional breast surgery market. The gantry business may have contributed meaningfully as well to the overall revenues.
Our model forecast indicates 3.9% year-over-year growth in Breast Health revenues in the first quarter of fiscal 2025.
The performance of the Diagnostics segment is expected to be led by the core Molecular Diagnostics business, mainly driven by the ongoing adoption of the BV/CV/TV assay on the Panther system. The biotheranostics business is likely to continue to post accretive growth through robust adoption and expanded coverage for the breast cancer index (BCI) test. A major milestone in the fiscal fourth quarter was the first U.S. customers going live with the Genius Digital Diagnostics system, or AI-assisted Pap test. We expect this to have boosted the cytology and perinatal revenues in the to-be-reported quarter.
Going by our model, the Diagnostics segment’s revenues are likely to increase 1.7% from the comparable fiscal 2024 figure.
On the Surgical side, growth is expected to be led by the core MyoSure and the platform's complementary fluent fluid management system. Hologic’s international business performance may have continued to remain broad-based, driven by the efforts to expand access to its technologies into more new markets.
Our model estimates a 1.4% improvement in this business in the fiscal first quarter.
Hologic’s Long-Term Prospects
In fiscal 2025, Hologic remains confident about its durable revenue base, diverse growth drivers and opportunities to strengthen its product pipeline through both organic growth and strategic acquisitions. The company continues to capitalize on the success of market-leading products such as the Panther, ThinPrep liquid-based Pap test, 3D mammography and NovaSure, which have set standards in their respective fields. Building on this foundation, Hologic is expanding the global footprint of the Panther Fusion system to meet the growing need for high throughput molecular diagnostic respiratory testing. At the same time, it is laying the groundwork to build more menus on the platform.
In Breast Health, the company is unveiling innovations that incorporate the latest advances in AI and workflow features. The upcoming U.S. launch of the Genius AI Detection PRO solution is expected to deliver greater accuracy and efficiency over its predecessor, Genius AI Detection 2.0. The addition of Endomagnetics strengthens its interventional breast care portfolio with distinct products such as the Magseed marker, Magtrace for lymphatic tracer and the Sentimag platform. Meanwhile, anticipation builds for the next-generation gantry launch, bringing enhancements to workflow, patient experience and image quality.
When it comes to the M&A strategy, Hologic pursues tuck-in deals that align with the three franchises, drive top-line growth and add accretion to earnings over time. The recent acquisition of Gynesonics brings their flagship Sonata System, broadening the range of minimally invasive solutions within the GYN Surgical portfolio. Backed by a strong balance sheet and consistent cash flow generation, the company is well-positioned to fund innovation and pursue both tuck-in M&A and share repurchases through its capital allocation strategy.
Hologic’s international business remains largely untapped, offering substantial growth opportunities across all its testing categories. Myosure capitalizes on being the sole minimally invasive alternative to a complete hysterectomy in many of the underpenetrated markets, fueling higher growth overseas than in the United States. Overall, the company is poised to capture more emerging market growth opportunities, leveraging its strong brand reputation and innovative offerings.
HOLX Stock Price Performance
In the past 30 days, Hologic shares have risen modestly by 0.6% compared with the industry’s 7.7% growth and the broader Zacks Medical sector’s 3.3% rise. The S&P 500 Composite has gained 3.4% in the same time frame.
In contrast, peers GE Healthcare (GEHC - Free Report) and Becton, Dickinson and Company (BDX - Free Report) have comparatively fared better.
HOLX One-Month Price Comparison
Image Source: Zacks Investment Research
HOLX Trading Cheap
At a forward 12-month Price/Earnings (P/E) of 16.57X, Hologic shares are trading at a discount than the industry average of 33.65X. The stock is graded a Value Score of B at present.
P/E Ratio Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
Conclusion: Hold HOLX Stock
Hologic’s core franchises are expected to drive impressive top and bottom-line results in the first quarter of fiscal 2025. With its innovative offerings and international expansion efforts, the company is poised for significant long-term growth. Existing investors may find holding the stock more prudent to reap future benefits. However, those eyeing the stock may want to wait for a better entry point as the company works through its divisional hurdles.
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Hologic's Q1 Earnings Coming Up: How to Play the Stock?
Hologic (HOLX - Free Report) is set to release first-quarter fiscal 2025 results on Feb. 5 after the closing bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for first-quarter earnings suggests a 3.1% increase year over year to $1.01 per share. The estimate has remained stable in the past 30 days. The Zacks Consensus Estimate for first-quarter revenues currently stands at $1.03 billion, a 1.4% improvement compared to the last year.
Image Source: Zacks Investment Research
In the last four quarters, Hologic surpassed the consensus mark three times and missed once, the average surprise being 3.07%.
Image Source: Zacks Investment Research
Q1 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 not the case here.
Earnings ESP: Hologic has an Earnings ESP of -0.13%. 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 Q1 Results
In the first quarter of fiscal 2025, Hologic is likely to have faced a few transitory challenges, including the pause of the Horizon DXA shipments in the Skeletal Health division. Although the company has been actively working with suppliers to resolve the issue, revenues are expected to have been affected in the first quarter. Our model forecast indicates a 43.3% year-over-year decline in business sales.
Additionally, recent hurricanes may have a residual impact, including the saline IV fluid shortage, which is likely to have impacted Hologic’s elective breast and surgical procedures. Nonetheless, we expect each of the company’s three core franchises to have performed well despite strong prior-year comparisons.
The Breast Health segment is likely to have benefited from robust service contract revenues from an expanded installed base. Interventional products like the portfolio of disposable needles and markers may have boosted the performance. Endomagnetics is likely to have helped Hologic thrive in the expanding interventional breast surgery market. The gantry business may have contributed meaningfully as well to the overall revenues.
Our model forecast indicates 3.9% year-over-year growth in Breast Health revenues in the first quarter of fiscal 2025.
The performance of the Diagnostics segment is expected to be led by the core Molecular Diagnostics business, mainly driven by the ongoing adoption of the BV/CV/TV assay on the Panther system. The biotheranostics business is likely to continue to post accretive growth through robust adoption and expanded coverage for the breast cancer index (BCI) test. A major milestone in the fiscal fourth quarter was the first U.S. customers going live with the Genius Digital Diagnostics system, or AI-assisted Pap test. We expect this to have boosted the cytology and perinatal revenues in the to-be-reported quarter.
Going by our model, the Diagnostics segment’s revenues are likely to increase 1.7% from the comparable fiscal 2024 figure.
On the Surgical side, growth is expected to be led by the core MyoSure and the platform's complementary fluent fluid management system. Hologic’s international business performance may have continued to remain broad-based, driven by the efforts to expand access to its technologies into more new markets.
Our model estimates a 1.4% improvement in this business in the fiscal first quarter.
Hologic’s Long-Term Prospects
In fiscal 2025, Hologic remains confident about its durable revenue base, diverse growth drivers and opportunities to strengthen its product pipeline through both organic growth and strategic acquisitions. The company continues to capitalize on the success of market-leading products such as the Panther, ThinPrep liquid-based Pap test, 3D mammography and NovaSure, which have set standards in their respective fields. Building on this foundation, Hologic is expanding the global footprint of the Panther Fusion system to meet the growing need for high throughput molecular diagnostic respiratory testing. At the same time, it is laying the groundwork to build more menus on the platform.
In Breast Health, the company is unveiling innovations that incorporate the latest advances in AI and workflow features. The upcoming U.S. launch of the Genius AI Detection PRO solution is expected to deliver greater accuracy and efficiency over its predecessor, Genius AI Detection 2.0. The addition of Endomagnetics strengthens its interventional breast care portfolio with distinct products such as the Magseed marker, Magtrace for lymphatic tracer and the Sentimag platform. Meanwhile, anticipation builds for the next-generation gantry launch, bringing enhancements to workflow, patient experience and image quality.
When it comes to the M&A strategy, Hologic pursues tuck-in deals that align with the three franchises, drive top-line growth and add accretion to earnings over time. The recent acquisition of Gynesonics brings their flagship Sonata System, broadening the range of minimally invasive solutions within the GYN Surgical portfolio. Backed by a strong balance sheet and consistent cash flow generation, the company is well-positioned to fund innovation and pursue both tuck-in M&A and share repurchases through its capital allocation strategy.
Hologic’s international business remains largely untapped, offering substantial growth opportunities across all its testing categories. Myosure capitalizes on being the sole minimally invasive alternative to a complete hysterectomy in many of the underpenetrated markets, fueling higher growth overseas than in the United States. Overall, the company is poised to capture more emerging market growth opportunities, leveraging its strong brand reputation and innovative offerings.
HOLX Stock Price Performance
In the past 30 days, Hologic shares have risen modestly by 0.6% compared with the industry’s 7.7% growth and the broader Zacks Medical sector’s 3.3% rise. The S&P 500 Composite has gained 3.4% in the same time frame.
In contrast, peers GE Healthcare (GEHC - Free Report) and Becton, Dickinson and Company (BDX - Free Report) have comparatively fared better.
HOLX One-Month Price Comparison
Image Source: Zacks Investment Research
HOLX Trading Cheap
At a forward 12-month Price/Earnings (P/E) of 16.57X, Hologic shares are trading at a discount than the industry average of 33.65X. The stock is graded a Value Score of B at present.
P/E Ratio Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
Conclusion: Hold HOLX Stock
Hologic’s core franchises are expected to drive impressive top and bottom-line results in the first quarter of fiscal 2025. With its innovative offerings and international expansion efforts, the company is poised for significant long-term growth. Existing investors may find holding the stock more prudent to reap future benefits. However, those eyeing the stock may want to wait for a better entry point as the company works through its divisional hurdles.