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Hologic Breast Health Arm Aids Strongly, Rising Costs Ail

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On May 21, we issued an updated research report on Hologic, Inc. (HOLX - Free Report) . The company’s progress in the domestic and international markets plus a strong pipeline of products and a solid performance delivered by its GYN Surgical and Molecular Diagnostics segments bolster our confidence. However, it continues to struggle with tough competition, particularly in the tomosynthesis market.

The stock carries a Zacks Rank #3 (Hold).

For the past three months, Hologic has outperformed its industry. The stock has lost 3.6% compared with the 4.4% dip of its industry. Hologic exited the second quarter of fiscal 2019 on a solid note. Strong top-line growth was led by a solid year-over-year rise in core businesses like Breast Health and Molecular Diagnostics.

We are also upbeat about the recent launches like Aptima Mycoplasma genitalium assay and the Unifi Analytics business intelligence tool for mammography centers in the United States, Omnhysteroscope in Europe and Canada, and LOCalize wireless breast lesion localization system in Europe.


Hologic is currently working to accelerate growth by leveraging core strengths and market-leading products, especially the large installed bases of Genius 3D mammography systems and Panther instruments.

The company is also increasing its penetration level in the international markets and broadening its product portfolio through both internal R&D and external business development. Within Breast Health, the company recently launched a string of products, which are 3Dimensions and 3D Performance gantries, Intelligent 2D, Clarity HD, SmartCurve, Affirm prone biopsy system and Brevera biopsy system.

Pertaining to Diagnostics, Hologic announced the receipt of the FDA approval for Aptima Mycoplasma genitalium assay. Under the GYN Surgical segment, Hologic notified the U.S. unveiling of its Omni hysteroscope, an advanced three-in-one modular scope.

On the flip side, Hologic is enduring an escalating cost pressure, which persistently left the company's adjusted operating margin stressed. Also, the company operating in a highly competitive landscape is a concern.

Key Picks

A few better-ranked stocks in the broader medical space are Masimo Corporation (MASI - Free Report) , CONMED (CNMD - Free Report) , DENTSPLY SIRONA (XRAY - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo’s long-term earnings growth rate is projected at 16.1%

CONMED’s long-term earnings growth rate is expected at 13.3%.

DENTSPLY SIRONA’s long-term earnings growth rate is predicted at 11.5%.

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