Here's Why You Should Retain HOLX Stock in Your Portfolio Now

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%.Let's delve deeperTailwinds for HOLX StockStrength 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.  Image Source: Zacks Investment ResearchHeadwinds for HOLX StockLower 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. Foreign Exchange Headwinds: We remain worried about the significant challenges Hologic faced owing to unfavorable foreign currency impact that has been affecting the company’s overall performance in the past few quarters. The company’s international sales are often denominated in foreign currencies, including the Euro, UK Pound and Renminbi. Changes in currency exchange rates, particularly the increase in the value of the dollar against any such foreign currency, may reduce the reported value of Hologic’s revenues outside the United States and associated cash flows.HOLX Stock Estimate TrendIn the past 30 days, the Zacks Consensus Estimate for Hologic’s fiscal 2025 earnings has moved south 0.5% to $4.29. The Zacks Consensus Estimate for HOLX’s fiscal 2025 revenues is pegged at $4.17 billion, suggesting a 3.5% rise from the year-ago reported number.Key MedTech PicksSome better-ranked stocks in the broader medical space are Omnicell OMCL, Penumbra PEN and ResMed RMD.Omnicell has an earnings yield of 3.7% compared to the industry’s 9.5%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 121.74%. OMCL’s shares have risen 15.2% against the industry’s 16.8% decline in the past year.OMCL carries a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Penumbra, carrying a Zacks Rank #2 (Buy) at present, has an estimated 2024 earnings growth rate of 33.5% compared with the industry’s 15.9%. Shares of Penumbra have lost 5.3% against the industry’s 5.3% growth in the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.ResMed, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 8.9% for fiscal 2025. Its shares have surged 33.4% compared with the industry’s 11.1% growth in the past year. RMD’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.41%. Just Released: Zacks Top 10 Stocks for 2024Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Omnicell, Inc. (OMCL): Free Stock Analysis Report ResMed Inc. (RMD): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks