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Hologic Banks on Molecular Diagnostics, Competition Rife

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On Dec 5, we issued an updated research report on Hologic, Inc.  (HOLX - Free Report) . The stock currently carries a Zacks Rank #3 (Hold).

In the past three months, this manufacturer of mammography systems for breast examination and osteoporosis assessment has been outperforming the industry  in terms of share price. The stock has gained 6.8% in contrast to 0.8% fall of the industry.

Hologic delivered a promising performance in the fourth quarter of fiscal 2017, with revenues and earnings beating the Zacks Consensus Estimate.  We are upbeat about the stellar performance of the company’s Molecular Diagnostics business in the United States. Notably, the company has been gaining from increasing market share and utilization of fully-automated Panther system. It has also been expanding its market by conforming to testing guidelines.



In this regard, Hologic recently announced the receipt of 510(k) clearance from the FDA for its Panther Fusion AdV/hMPV/RV assay — a multiplexed assay that runs on the new Panther Fusion system. 

We are also upbeat about Hologic progressing well internationally, mainly on the back of solid contributions from the Molecular Diagnostics business. In this regard, the company has been reaping benefits of a new leadership, healthy Panther placements and multiple product introductions, including viral load assays globally. Notably, the last reported quarter marked the sixth consecutive period of double-digit growth for Molecular Diagnostics internationally.

Also, under the Breast Health business, in November 2017, the company announced plans to make all of its mammography systems available for the Dutch Breast Cancer Screening Program in collaboration with Tromp Medical, Hologic’s distributor in the Netherlands.

Also, a strong cash position buoys optimism.

On the flip side, Hologic operates in a highly competitive industry. Its mammography, related products and subsystems compete on a global level. Also, blood screening divestiture is expected to impede the company’s growth momentum.

Key Picks

A few better-ranked medical stocks are PetMed Express, Inc. , Align Technology, Inc. (ALGN - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) . Notably, PetMed, Align Technology and Myriad Genetics sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 84.1% over a year.

Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 137.4% in a year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 97.5% in a year’s time.

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