On Jun 25, we issued an updated research report on
) - provider of diagnostics, medical imaging systems and surgical
products for women's health. After several quarters of dismal
performances, Hologic successfully posted two consecutive quarters
of solid growth.
In the last reported quarter, Hologic exceeded the Zacks
Consensus Estimate as well as the company guidance on both fronts.
Adjusted earnings per share of 37 cents increased 7.9% year over
year and beat the Zacks Consensus Estimate by 4 cents besides
exceeding the company's guidance range of 32-34 cents. Likewise,
revenues of $625.0 million steered ahead of the Zacks Consensus
Estimate of $610 million and edged past the company's guidance
range of $605−$615 million.
Despite looming headwinds such as declining revenues in the core
segment, and the ongoing shift to 3D tomosynthesis technology
leading to lower sales of legacy products, management seems
strategically prepared to get over these challenges.
The major goal of management is to sustain top- and bottom-line
organic growth going ahead. The strategy lies in accelerating the
performance of the major growth drivers of the company, viz.
Diagnostics, Breast Health and Surgical, and establishing a strong
foothold globally. The raised fiscal guidance also reinstils our
faith in the company.
According to Hologic, global expansion is going to be a critical
element of its growth strategy over the long term. While many of
the company's best-in-class products command a leading share in the
domestic market, they hold a disproportionately low market share
internationally. This indicates huge untapped potential. The
company expects new executive leadership in this area to help
further organic growth in each of the company's businesses on a
However, despite all of Hologic's attempts, we are wary about
the dull third-quarter guidance provided by the company which hints
that the ongoing concerns may persist in the coming fiscal as
Other Stocks to Consider
While Hologic carries a Zacks Rank #3 (Hold), some notable
stocks in the Medical Instruments sector are
Globus Medical, Inc.
). All the three stocks carry a Zacks Rank #2 (Buy).
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