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Hologic (HOLX) Hits a 52-Week High: What's Driving the Stock?

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On Jan 17, shares of Hologic (HOLX - Free Report) scaled a new 52-week high of $54.73, closing the session marginally lower at $54.32. Its impressive preliminary first-quarter fiscal 2020 earnings announcement on Jan 12 had no initial impact on the stock price. However, the stock eventually rallied 2.7% to $54.32 to close the session on Jan 17.

Strong top-line growth across core businesses, several recent launches and impressive full-year guidance prompted the rally.

Let us take a closer look at the factors driving growth.

Robust Preliminary Results

For the first-quarter of fiscal 2020, Hologic expects total revenue growth of 2.4% (up 2.8% at constant exchange rate or CER) on a year-over-year basis to $850.5 million, above the Zacks Consensus Estimate of $844.03 million. The revenue expectation also marginally exceeds the high end of the company's earlier provided guidance of $835-$850 million.


Excluding acquisitions and divestitures, revenues are estimated to increase 4.1% (suggesting a 4.6% rise at CER). According to the company, in the fiscal first quarter, revenues were strong within Surgical and Diagnostics.

Other Encouraging Factors

The company exited the fourth quarter of fiscal 2019 on a promising note, with year-over-year growth in earnings and revenues. International revenues improved 5.7% year over year during the quarter. Per management, the upside was driven by strong contributions from the Breast Health, Molecular Diagnostics and GYN Surgical businesses.

Adjusted operating margin in the quarter expanded a stupendous 419 bps.

The company announced the extension of the CE Mark for its LOCalizer radiofrequency identification tag for long-term placement in November 2019. Hologic also attained FDA approval for its 3DQuorum Imaging Technology around the same time.      

Market has been upbeat about the company’s launch of Omni Lok cervical seal, the latest offering from its growing portfolio of hysteroscopic devices last October.

Meanwhile, Hologic has been having a great run on the bourses in the past year. The stock has rallied 23.2%, higher than the broader industry’s growth of 14.6%. The company currently has a market cap of $14.57 billion.

Zacks Rank & Stocks Worth a Look

Hologic currently carries a Zacks Rank #3 (Hold).

Haemonetics HAE has a Zacks Rank #1 (Strong Buy) and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hill-Rom’s HRC long-term earnings growth rate is estimated at 11.7%. The company currently carries a Zacks Rank #2 (Buy).

Omnicell OMCL has a long-term earnings growth rate of 12.5%. The company currently carries Zacks Rank #2.

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