In This Article:
Hologic, Inc.’s HOLX robust strength in the Surgical business is poised to drive growth in the upcoming quarters. The company's strategic initiatives look highly promising for the stock. Meanwhile, declining COVID-19 sales and adverse currency fluctuations can dent Hologic’s operations.
In the past year, this Zacks Rank #3 (Hold) company’s shares have risen 0.9% compared with 3.6% growth of the industry and a 24.5% increase of the S&P 500.
The renowned medical device company has a market capitalization of $16.36 billion. Hologic beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 3.07%.
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Tailwinds for HOLX Stock
Strength in GYN Surgical: The transformation of Hologic’s Surgical business over the past few years has been phenomenal. The Surgical business underscores the value of internal innovation and product line additions through M&A. The sum of both strategies has injected new life into the business and transformed it into a meaningful growth driver for the company. The latest agreement to purchase Gynesonics, along with Acessa and Bolder’s acquisition, is enhancing HOLX’s existing Surgical portfolio.
In the fiscal fourth quarter, GYN Surgical business grew 5.4%, driven by strong contributions from a hysteroscopic portfolio of MyoSure and the related Fluent fluid management system. The laparoscopic portfolio is building momentum and growing into a larger driver for the division. Surgical’s international performance remains a strong highlight.
Strategic Initiatives Drive Growth: To streamline its operations and reduce the cost of revenues, Hologic has been adopting a few significant strategies over the past few years. The company has invested deliberately and opportunistically in commercial areas where management has recognized a good return. These include Hologic’s Genius marketing campaign in Breast Health and cervical cancer co-testing initiatives in Diagnostics. Per management, these strategic initiatives are already paying off through increased brand awareness, market share gains and price stability, all of which should contribute to the company’s higher sales.
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Headwinds for HOLX Stock
Lower COVID Sales Hamper Growth: During the COVID-19 public health emergency, Hologic launched several assays to detect COVID-19. With the pandemic in the rearview mirror, COVID testing demand has also witnessed a nosedive. For several quarters in a row, the declining COVID-19 assay revenues continued to be a headwind to some of the company’s key performance metrics.