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Here's Why You Should Invest in Hologic (HOLX) Stock Now

Zacks Equity Research

Hologic, Inc. HOLX has been performing impressively of late, courtesy of a strong product pipeline as well as revenue growth at the GYN Surgical and Molecular Diagnostics segments.

The company has outperformed the industry in the past year. The stock has rallied 24.1% compared with the industry’s 6.1% decline.

The global leader of women’s healthcare has a market cap of $13.1 billion. The company’s expected growth rate for next five years is 9%.

Banking on solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Molecular Diagnostics Maintains GrowthThe segment saw double-digit revenue growth at CER in the last reported quarter.Global growth is being driven by expanding market share and increasing utilization of fully automated Panther system. Also, higher uptake of Aptima women's health products is driving the segment. In terms of research and development, the company has received a series of regulatory clearances in the United States over the past 11 consecutive quarters, including three viral load tests for HIV, hepatitis C and hepatitis B.


GYN Surgical Continues to Grow:  The segment registered 5.2% growth in the last-reported quarter, marking the highest revenue growth rate in the past eight quarters. The company has registered solid quarterly results on the back of MyoSure. The company continues to see strong market adoption of its advanced three-in-one modular scope — Omni hysteroscope — following its U.S. launch last December.

Growth InitiativesIn order to streamline operations and reduce cost of revenues, the company has adopted a few significant strategies over the past few years. These include Hologic’s Genius marketing campaign in Breast Health, cervical cancer co-testing initiatives in Diagnostics as well as efforts to gain market share banking on NovaSure. Moreover, to strengthen its product pipeline, Hologic is working on innovation and product launches. In this regard we note that, the company recently launched an array of products viz. Aptima BV and Aptima CV/TV assays in the United States, the Trident HD specimen radiography system in the United States, Europe and Canada; and the ThinPrep Genesis processor for cytology slide and molecular test preparation in Europe.

Which Way Are Estimates Treading?

For the fourth quarter of fiscal 2019, the Zacks Consensus Estimate for earnings is pegged at 65 cents, suggesting 12.1% growth from the year-ago quarter’s figure. The same for revenues is pegged at $843.8 million, calling for year-over-year growth of 3.7%.

For 2019, the Zacks Consensus Estimate for earnings is pegged at $2.44, suggesting 9.4% year-over-year growth. The same for revenues is pegged at $3.35 billion, indicating 3.9% rise from the prior-year quarter’s level.

Stocks Worth a Look

A few other top-ranked stocks in the broader medical space are Medtronic MDT, Baxter BAX and NuVasive NUVA, each carrying a Zacks Rank #2.

Medtronic’s long-term earnings growth rate is expected at 7.13%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

NuVasive’s long-term earnings growth rate is expected to be 12.75%.

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