Hologic (HOLX) Down 1.7% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Hologic (HOLX). Shares have lost about 1.7% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Hologic due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Hologic's Q4 Earnings Miss, Revenues Top EstimatesHologic, Inc. reported adjusted earnings per share of $1.01 in the fourth quarter of fiscal 2024, up 13.5% year over year. However, the bottom line missed the Zacks Consensus Estimate by 0.9%.The adjustments include charges and benefits related to the amortization of acquired intangible assets, restructuring and integration/consolidation costs and many others.The company’s GAAP earnings were 76 cents in the quarter compared with 37 cents in the year-ago period.Fiscal 2024 adjusted earnings per share was $4.08, up 3% from fiscal 2023.HOLX’s Q4 and Fiscal 2024 RevenuesRevenues totaled $987.9 million in the quarter, up 4.5% year over year (up 4.2% at the constant exchange rate or CER). The metric surpassed the Zacks Consensus Estimate by 0.9%.Fiscal 2024 revenues of $4.03 billion were nearly consistent with the fiscal 2023.Geographical Analysis of Q4 Revenues of HOLXIn the fiscal fourth quarter, U.S. revenues totaled $745.6 million, an increase of 4.2% year over year. This topped our model’s projection of $736.9 million.International revenues amounted to $242.3 million, up 5.4% year over year and up 4.3% at CER. Our model’s projection was $244.4 million.HOLX’s Segmental Breakdown of Q4 RevenuesDiagnosticsRevenues in the segment increased 6.5% year over year (up 6.2% at CER) to $443.3 million in the quarter under review. Excluding COVID-19 revenues, Diagnostics revenues increased 9.5% on a reported basis. This compares with our model’s segmental projection of $438.5 million.Within the division, Cytology & Perinatal revenues of $116.5 million rose 0.7% at CER. This compares with our model’s segmental projection of $117.6 million.Molecular Diagnostics revenues of $319.3 million increased 9.1% at CER. Our model’s projection was $303 million.Blood Screening revenues of $7.5 million fell 19.4% year over year at CER. Our model forecast for the business was $8.5 million.Breast HealthThe segment’s revenues increased 6.4% from the year-ago period’s (up 6.2% at CER) levels to $375.5 million, driven by strong Breast Imaging Service revenues and the addition of Endomagnetics.Our model projected revenues of $368.5 million for this segment. Excluding SSI and Endomagnetics, Breast Health revenues increased 5.6%, or 5.3% year over year at constant currency.GYN SurgicalThe business reported a 5.7% year-over-year (up 5.4% at CER) increase in revenues to $156.5 million, led by the core MyoSure and the platform's complementary Fluent fluid management system. Our model projected revenues of $155.3 million in this segment.Skeletal HealthRevenues declined 54.6% year over year (down 54.9% at CER) to $12.7 million. Our model projected revenues of $28.4 million for this segment.Hologic’s Operational UpdateIn the fiscal fourth quarter, the company-provided adjusted gross margin increased 110 basis points (bps) to 61.5%, due to an increase in sales compared with the prior year period.The company’s adjusted operating margin was 28.3%, an expansion of 170 bps, due to higher revenues and improved operating leverage compared with the prior year period.HOLX’s Financial UpdateHologic ended the fourth quarter of fiscal 2024 with cash and cash equivalents of $2.16 billion compared with $2.72 billion at the fiscal 2023 end.Total long-term debt (including the current portion) was $2.50 billion, down from $2.82 billion in fiscal 2023.Net cash provided by operating activities at the end of the fiscal fourth quarter was $1.29 billion compared with $1.05 billion a year ago.Hologic’s Outlook for Fiscal 2025 and Q1Hologic’s fresh guidance includes the financial results of the Endomagnetics acquisition for the full year but does not include any contribution from the Gynesonics acquisition. There is no year-over-year net selling day impact comparing 2025 to 2024. Additionally, the guidance incorporates the expected impact from the ongoing temporary stop-ship of Horizon DXA systems in Skeletal Health.Fiscal 2025 revenues are projected to be $4.15-$4.20 billion, indicating year-over-year growth of 3-4% on a reported basis, 2.3-3.5% at CER and 3.4-4.7% organically. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $4.23 billion.Adjusted earnings per share for fiscal 2025 is anticipated at $4.25-$4.35 with projected growth of 4.2-6.6% year over year. The Zacks Consensus Estimate for the same is pegged at $4.36 per share.For first-quarter fiscal 2025, the company projects revenues between $1.025 billion and $1.035 billion.  This indicates year-over-year growth of 1.2-2.2% on a reported basis, 0.4-1.4% at CER and 1.8-2.8% organically. The Zacks Consensus Estimate for the metric is pegged at $1.05 billion.Adjusted earnings per share for the first quarter is estimated between $1.00 and $1.03, which implies an increase of 2-5.1% year over year. The Zacks Consensus Estimate for the metric is pegged at $1.04 per share.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresAt this time, Hologic has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hologic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerHologic is part of the Zacks Medical - Instruments industry. Over the past month, Inari Medical, Inc. (NARI), a stock from the same industry, has gained 3%. The company reported its results for the quarter ended September 2024 more than a month ago.Inari Medical reported revenues of $153.39 million in the last reported quarter, representing a year-over-year change of +21.4%. EPS of -$0.13 for the same period compares with $0.05 a year ago.For the current quarter, Inari Medical is expected to post a loss of $0.03 per share, indicating a change of -160% from the year-ago quarter. The Zacks Consensus Estimate has changed +12.9% over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Inari Medical. Also, the stock has a VGM Score of D.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 Hologic, Inc. (HOLX): Free Stock Analysis Report Inari Medical, Inc. 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