Hologic Brings in New Leadership: A Signal to Stay Put With the Stock?

Last Friday, Hologic HOLX appointed finance veteran Wayde McMillan to its board of directors and also to the Audit and Finance Committee. Mr. McMillan’s extensive leadership experience includes serving as Chief Financial Officer (“CFO”) and Vice President, Finance at Medtronic’s MDT Minimally Invasive Therapies Group. He also held several key positions at Covidien plc before Medtronic acquired it in 2015. Additionally, McMillan held CFO positions in leading healthcare companies like Solventum Corporation (a 3M Company carve-out) and Insulet.With the latest addition, Hologic’s current board stands to benefit from McMillan’s wealth of financial expertise and profound understanding of the MedTech industry. The market sentiment also remained positive after the announcement, as the company’s shares saw a 2.6% rise during the April 4 after-hours session.HOLX Outpaces Industry and PeersOver the past month, HOLX stock has declined 7.2%, narrower than the industry’s 10.3% plunge and the broader Medical Market’s 9.2% slide. The S&P 500 composite has dropped 9.7% in value in the same time frame. In comparison to its industry peers, the company has stood more resilient than Medtronic and Abbott ABT, which dipped 11.6% and 9.4%, respectively. HOLX 1-Month Price PerformanceImage Source: Zacks Investment ResearchAmid growing U.S. tariff pressure disrupting the MedTech space, like many industries, Hologic appears to be holding up relatively better. Abbott, which generated roughly 61% of its net sales outside the United States in 2024, relies significantly on a large and complex global supply chain to run its operations. The impact of mounting challenges, such as difficulties in procuring materials, delayed delivery of essential drugs, contract negotiations and more, would eventually be passed down to physicians, hospitals, payers and patients in the form of higher costs, adding to the presently elevated healthcare costs. As a result, these challenges also weigh on the stock’s performance.That said, Hologic isn’t completely immune to these ongoing economic instabilities.Hologic’s Current RoadblocksThe company manufactures a bulk of its disposal Breast Health products and all of the Surgical products (apart from Gynesonics) in Costa Rica, where Trump imposed a new baseline tariff of 10% as part of its “Liberation Day” tariff plan, effective as of April 5. Moreover, a hefty 25% is now applicable to all imports from Mexico, which means Hologic is now paying more to bring in its Skeletal Health and Gynesonics products manufactured there. In an already volatile global macro economy, marked by inflation, supply-chain challenges, rising interest rates and ongoing geopolitical tensions, the  possibility of higher tariffs or new barriers to entry could weigh heavily on the company’s business, results of operations and financial condition.Meanwhile, Hologic expects up to a $30 million revenue impact for the rest of fiscal 2025 due to disruptions caused by the temporary freezing of all U.S. foreign assistance funds to the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), its primary partner for HIV testing in developing countries. A stronger U.S. dollar is also expected to be a drag on results, with Hologic now projecting a $30 million headwind to revenues for the full year, more than a $60 million swing from its original expectations.Moreover, HOLX is preparing for a slowdown in gantry placements within its Breast Health unit.  After rising 9.1% in fiscal 2024, the segment dipped 2.1% in the first quarter of fiscal 2025, mainly due to lower sales of capital equipment. The surge in mammography sales post the worldwide chip shortage clouded Hologic’s view of what a normal gantry market would like, leading to challenging year-over-year comparisons. Considering all these headwinds, the company cut its fiscal 2025 revenue projections by $100 million, targeting a range of $4.15-$4.20 billion.Hologic’s Technical IndicatorsHOLX stock has been consistently trading below the 50-day simple moving average (SMA), pointing to a short-term bearish trend.  At the current price, shares have been down 1.3% from the previous close.Hologic Below 50-Day SMAImage Source: Zacks Investment ResearchHowever, before making any decision about the stock, it’s important to understand the bigger picture. The company has long established itself as a renowned women’s health innovator, gaining from several durable growth drivers spread across each of its businesses. Here, we take a look at two of them. Hologic’s Diagnostics Arm: the Biggest StrengthAt the heart of Hologic’s largest division, Diagnostics, lies Molecular Diagnostics, which benefits from its two growth engines — the Biotheranostics lab testing business and BV CV/TV assay. With the latter, Hologic is leveraging its physician sales strength to expand into the U.S. vaginitis testing market, tapping into the vast opportunity of the test. Meanwhile, the robust adoption and expanding coverage for the Breast Cancer Index test promises a solid runway for Biotheranostics’ future growth.The company’s core women's health assays on the automated Panther platform have maintained leading market positions in the competitive diagnostics landscape. In February, Hologic secured the FDA’s 510(k) clearance for the Aptima SARS-CoV-2 assay, building on the Emergency Use Authorization granted in May 2020. Within Cytology and Perinatal, the company is leading the way with its FDA-cleared Genius Digital Diagnostics system. A significant improvement to the existing Pap test workflows, the platform combines deep-learning-based artificial intelligence (AI) with cutting-edge volumetric imaging technology to detect pre-cancerous lesions and cervical cancer cells.Hologic Eyes More International ExpansionThe company’s international business quietly continues to drive strong top-line growth, highlighting its ability to translate potential growth opportunities into revenues. Many of its top-performing products, such as ThinPrep Pap, and 2D and 3D mammo tests, are more established in the U.S. market but hold a disproportionately low market share overseas. The Surgical business is gaining traction globally, particularly with Myosure, which capitalizes on the rising demand for minimally invasive options for treating uterine polyps and fibroids in underpenetrated markets.Moreover, with the addition of Gynesonics (acquired in January 2025), the Surgical arm has gained access to its flagship Sonata System, complementing and expanding Hologic’s minimally invasive solutions for heavy periods and fibroids. In the most recent fiscal year, Gynesonics’ revenues of nearly $28 million included a healthy mix of international sales and is expected to deliver strong double-digit sales growth through Hologic’s large Gyn sales team. Overall, the company is taking steps to go direct in more geographies and businesses while bolstering its market access capabilities worldwide.HOLX Stock ValuationWith a forward five-year price-to-earnings (P/E) of 13.66X, Hologic’s shares are much discounted than the industry average of 26.54X. It has a Value Score of B at present.P/E Forward Twelve Months (F12M)Image Source: Zacks Investment ResearchMeanwhile, Abbott and Medtronic have P/E of 23.47X and 14.27X respectively, putting Hologic at a more favorable spot from a valuation standpoint. How to Play HOLX Stock?Hologic’s top leadership team is now bolstered with the addition of a highly distinguished finance expert with a deep understanding of the MedTech industry. Among its divisions, the Diagnostics business continues to lead the way, powered by its steady growth drivers. The International side of business presents ample opportunities for meaningful growth in the coming years, with the Surgical arm emerging as a key contributor. With the stock’s attractive valuation compared to its peers, existing shareholders may find it prudent to stay invested. Still, those eyeing to add HOLX stock might consider waiting until the heightened macroeconomic uncertainties begin to ease. 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.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Abbott Laboratories (ABT): Free Stock Analysis Report Medtronic PLC (MDT): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks