Shares of Hologic HOLX recorded a new 52-week low of $69.46 during Monday’s trading before finishing slightly higher at $70.29. Yesterday, the stock ended at $70.20, marking the lowest close in recent sessions. The latest drop in the share price can be attributed to the company’s mixed preliminary revenue results for the fiscal 2025 first quarter, released earlier this week.

In the past six months, Hologic shares have dipped 12%, steeper than the industry’s 0.6% fall and the broader market’s 11.1% decline. It also lagged behind the S&P 500 Composite’s 3.5% gain. Meanwhile, peers like QIAGEN QGEN and Becton, Dickinson and Company BDX have comparatively fared better in the same period.

Six-Month Price Comparison

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On top of that, technical indicators point to short-term weakness, as HOLX stock has been trading below the 50-day simple moving average (SMA) for some time now.

Hologic Below 50-Day SMA

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Hologic’s Lackluster Q1 Fiscal 2025 Preliminary Results

Before taking the stage at the Annual J.P. Morgan Healthcare Conference yesterday, Hologic provided a glimpse into its first-quarter results. The company anticipates total revenues of approximately $1,021.8 million, representing an increase of 0.9% from the prior-year period.

This compares unfavorably with the Zacks Consensus Estimate for the fiscal first quarter, which projects a 1.4% increase in Hologic’s revenues from the prior-year period. Meanwhile, the Zacks Consensus Estimate for EPS indicates a 3.1% improvement.

When adjusted for constant currency, preliminary top-line results came in line with the company’s expectations, although the strengthening of the U.S. dollar reduced revenues by approximately $9 million. Performance varied by segments, with Diagnostics revenues increasing 5.1% from the prior year to $470.6 million. Breast Health revenues fell by 2.3% to $361.9 million, while GYN Surgical revenues improved 2.5% to $166.3 million. Skeletal Health saw a notable decline, down 37.8% to $15.8 million.

In its November 2024 guidance, the company highlighted several transitory headwinds that may affect fiscal first-quarter results, such as the temporary halt in Horizon DXA shipments in the Skeletal Health business and strong prior-year comparisons in the Surgical and Breast Health divisions. Also, BioZorb 3D Bioabsorbable Markers were withdrawn from the market following reports of serious adverse events occurring in patients who had the devices implanted in breast tissue.

Furthermore, Hologic factored in the challenges of the respiratory season and the lingering impacts of recent hurricanes, including the saline IV fluid shortage being a headwind to its more elective breast and surgical procedures. Despite these setbacks, the company expects both GAAP and non-GAAP earnings per share (EPS) to be near the high end of its forecasted range.

New Addition to Hologic’s Surgical Arm

Starting 2025 on a strong note, Hologic completed the acquisition of Gynesonics, a developer of minimally invasive solutions for women’s health, for approximately $350 million. The addition brings the Sonata System, a transformative treatment for symptomatic uterine fibroids, to the company’s GYN Surgical portfolio of products. Furthermore, the deal aligns with Hologic’s commitment to making minimally invasive treatment options more accessible for women. Initially announced in October 2024, the deal follows shortly after Hologic completed the acquisition of Endomagnetics Ltd. 

Other major acquisitions within the GYN Surgical division include Bolder Surgical (2021) and Acessa Health Inc. (2020) — both of which are a reflection of Hologic’s tuck-in acquisition strategy. The approach utilizes robust cash flows to add products that leverage its existing channel strength and accelerate growth.

Hologic’s Strengths and Opportunities

Each of Hologic’s core franchises has multiple durable growth drivers gained both organically and inorganically. In Molecular Diagnostics, the BV/CV/TV assay remains a key growth catalyst with significant potential for further expansion as more vaginitis tests transition to the FDA-approved Panther system. The biotheranostics business also continues to generate accretive growth through increased adoption and expanded coverage for the breast cancer index (BCI) test.

Additionally, the Genius Digital Diagnostic System, or Digital Pap test, has received positive feedback from its early adopters for its enhanced disease detection capabilities and streamlined efficiency. Hologic celebrated a key milestone with the first U.S. customers going live with the system in the fourth quarter of fiscal 2024.

The Breast Health segment benefits from an expanded suite of offerings, spanning from imaging to biopsy and surgery. Endomagnetics’ portfolio lineup, featuring the Magseed marker, Magtrace for lymphatic tracer and the Sentimag platform, directly complements this franchise and expands the breadth of interventional breast surgery options. The gantry side of the business is preparing for the upcoming launch of its next-generation gantry, which aims to improve workflows, patient experience and image quality. Alongside this, Hologic’s latest breast health innovations include the next-generation Genius AI Detection PRO solution, which is set to launch in the United States soon.

Surgical growth continues to be fueled by drivers, MyoSure and the related Fluent Fluid Management System. Hologic is capitalizing on the vastly underpenetrated international markets to drive robust international performance. Over the next few years, the company expects meaningful growth prospects for its international business, both from entering new regions and deepening its presence in existing ones. With its strong brand reputation and cutting-edge products, Hologic is well-positioned to take advantage of emerging market opportunities, driving sustainable growth for years to come.

Furthermore, the company’s consistently strong cash and operating cash flows give it the ability to execute both elements of its capital allocation strategy — pursuing tuck-in opportunities that align with its three franchises and share repurchases. In November 2024, the company executed an accelerated share repurchase (ASR) agreement of $250 million and repurchased 11.2 million shares for $808 million throughout the year.  

HOLX Stock Valued Cheap 

At a forward price-to-earnings (P/E) multiple of 16.00X, Hologic is well below the industry average of 32.29X and its median of 33.01X. Currently, it has a Value Score of B.

Price-to-Earnings Forward Twelve Months (F12M)

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Our Take on HOLX

The company’s dull top-line preliminary results for the first quarter of fiscal 2025 have led to a significant drop in its stock price. However, Hologic’s M&A momentum, robust financial stability, portfolio strength and international opportunity show promising abilities for long-term growth. Current shareholders may want to hold the stock for now, while potential investors could wait for a more favorable entry point.

Hologic carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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